Exhibit 4.1
Manufactured Housing Contract Senior/Subordinate Pass-Through
Certificates, Series 2001-1
POOLING AND SERVICING AGREEMENT
among
CONSECO FINANCE SECURITIZATIONS CORP.
as Seller
CONSECO FINANCE CORP.
as Originator and Initial Servicer
and
U.S. BANK NATIONAL ASSOCIATION
not in its individual capacity but solely as Trustee
Dated as of March 1, 2001
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS.............................................................................................. 1-1
SECTION 1.01 General......................................................................................... 1-1
SECTION 1.02 Specific Terms.................................................................................. 1-1
SECTION 1.03 Calculations.................................................................................... 1-37
ARTICLE II ESTABLISHMENT OF TRUST; TRANSFER OF CONTRACTS........................................................... 2-1
SECTION 2.01 Closing......................................................................................... 2-1
SECTION 2.02 Conditions to the Closing....................................................................... 2-2
SECTION 2.03 Conveyance of the Subsequent Contracts.......................................................... 2-4
SECTION 2.04 Acceptance by Trustee........................................................................... 2-5
SECTION 2.05 REMIC Provisions................................................................................ 2-6
ARTICLE III REPRESENTATIONS AND WARRANTIES......................................................................... 3-1
SECTION 3.01 Representations and Warranties Regarding the Seller............................................. 3-1
SECTION 3.02 Representations and Warranties Regarding Each Contract.......................................... 3-2
SECTION 3.03 Additional Representations and Warranties....................................................... 3-6
SECTION 3.04 Representations and Warranties Regarding the Contracts in the Aggregate......................... 3-6
SECTION 3.05 Representations and Warranties Regarding the Contract Files..................................... 3-9
SECTION 3.06 Repurchase of Contracts or Substitution of Contracts for Breach
of Representations and Warranties........................................................................ 3-9
SECTION 3.07 No Repurchase or Substitution Under Certain Circumstances....................................... 3-12
SECTION 3.08 Staged-Funding Contract Reserve Account......................................................... 3-13
ARTICLE IV PERFECTION OF TRANSFER AND PROTECTION OF SECURITY INTERESTS............................................. 41
SECTION 4.01 Custody of Contracts............................................................................ 4-1
SECTION 4.02 Filings......................................................................................... 4-2
SECTION 4.03 Name Change or Relocation....................................................................... 4-2
SECTION 4.04 Chief Executive Office.......................................................................... 4-2
SECTION 4.05 Costs and Expenses.............................................................................. 4-3
ARTICLE V SERVICING OF CONTRACTS................................................................................... 5-1
SECTION 5.01 Responsibility for Contract Administration...................................................... 5-1
SECTION 5.02 Standard of Care................................................................................ 5-1
SECTION 5.03 Records......................................................................................... 5-1
SECTION 5.04 Inspection; Computer Tape....................................................................... 5-1
SECTION 5.05 Certificate Account............................................................................. 5-2
SECTION 5.06 Enforcement..................................................................................... 5-4
SECTION 5.07 Trustee to Cooperate............................................................................ 5-5
SECTION 5.08 Costs and Expenses.............................................................................. 5-6
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TABLE OF CONTENTS
(continued)
Page
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SECTION 5.09 Maintenance of Insurance........................................................................ 5-6
SECTION 5.10 Repossession.................................................................................... 5-8
SECTION 5.11 Commingling of Funds............................................................................ 5-8
SECTION 5.12 Covenants, Representations and Warranties of Servicer........................................... 5-9
ARTICLE VI REPORTS AND TAX MATTERS................................................................................. 6-1
SECTION 6.01 Monthly Reports................................................................................. 6-1
SECTION 6.02 Certificate of Servicing Officer................................................................ 6-1
SECTION 6.03 Other Data...................................................................................... 6-1
SECTION 6.04 Annual Report of Accountants.................................................................... 6-1
SECTION 6.05 Statements to Certificateholders................................................................ 6-2
SECTION 6.06 Payment of Taxes................................................................................ 6-7
ARTICLE VII SERVICE TRANSFER....................................................................................... 7-1
SECTION 7.01 Event of Termination............................................................................ 7-1
SECTION 7.02 Transfer........................................................................................ 7-1
SECTION 7.03 Trustee to Act; Appointment of Successor........................................................ 7-2
SECTION 7.04 Notification to Certificateholders.............................................................. 7-3
SECTION 7.05 Effect of Transfer.............................................................................. 7-3
SECTION 7.06 Transfer of Certificate Account................................................................. 7-3
ARTICLE VIII PAYMENTS.............................................................................................. 8-1
SECTION 8.01 Monthly Payments................................................................................ 8-1
SECTION 8.02 Permitted Withdrawals from the Certificate Account.............................................. 8-2
SECTION 8.03 Payments........................................................................................ 8-2
SECTION 8.04 [Reserved]...................................................................................... 8-9
SECTION 8.05 Class C Subsidiary Certificateholder's Purchase Option; Auction
Sale; Additional Principal Distribution Amount........................................................... 8-9
SECTION 8.06 Capitalized Interest Account.................................................................... 8-11
SECTION 8.07 Pre-Funding Account............................................................................. 8-12
ARTICLE IX THE CERTIFICATES AND UNCERTIFICATED SUBSIDIARY INTERESTS................................................ 9-1
SECTION 9.01 The Certificates................................................................................ 9-1
SECTION 9.02 Registration of Transfer and Exchange of Certificates........................................... 9-2
SECTION 9.03 No Charge; Disposition of Void Certificates..................................................... 9-5
SECTION 9.04 Mutilated, Destroyed, Lost or Stolen Certificates............................................... 9-6
SECTION 9.05 Persons Deemed Owners........................................................................... 9-6
SECTION 9.06 Access to List of Certificateholders' Names and Addresses....................................... 9-6
SECTION 9.07 Authenticating Agents........................................................................... 9-7
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TABLE OF CONTENTS
(continued)
Page
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ARTICLE X INDEMNITIES.............................................................................................. 10-1
SECTION 10.01 Seller's and Originator's Indemnities.......................................................... 10-1
SECTION 10.02 Liabilities to Obligors........................................................................ 10-1
SECTION 10.03 Tax Indemnification............................................................................ 10-1
SECTION 10.04 Servicer's Indemnities......................................................................... 10-1
SECTION 10.05 Operation of Indemnities....................................................................... 10-2
SECTION 10.06 REMIC Tax Matters.............................................................................. 10-2
ARTICLE XI THE TRUSTEE............................................................................................. 11-1
SECTION 11.01 Duties of Trustee.............................................................................. 11-1
SECTION 11.02 Certain Matters Affecting the Trustee.......................................................... 11-2
SECTION 11.03 Trustee Not Liable for Certificates or Contracts............................................... 11-3
SECTION 11.04 Rights of Certificateholders to Direct Trustee and to Waive
Event of Termination..................................................................................... 11-3
SECTION 11.05 The Servicer to Pay Trustee's Fees and Expenses................................................ 11-4
SECTION 11.06 Eligibility Requirements for Trustee........................................................... 11-4
SECTION 11.07 Resignation or Removal of Trustee.............................................................. 11-5
SECTION 11.08 Successor Trustee.............................................................................. 11-5
SECTION 11.09 Merger or Consolidation of Trustee............................................................. 11-6
SECTION 11.10 Tax Returns.................................................................................... 11-6
SECTION 11.11 Obligor Claims................................................................................. 11-6
SECTION 11.12 Appointment of Co-Trustee or Separate Trustee.................................................. 11-7
SECTION 11.13 Agents of Trustee.............................................................................. 11-8
ARTICLE XII MISCELLANEOUS.......................................................................................... 12-1
SECTION 12.01 Servicer Not to Assign Duties or Resign; Delegation of Servicing Functions..................... 12-1
SECTION 12.02 Maintenance of Office or Agency................................................................ 12-1
SECTION 12.03 Termination.................................................................................... 12-2
SECTION 12.04 Acts of Certificateholders..................................................................... 12-3
SECTION 12.05 Calculations................................................................................... 12-4
SECTION 12.06 Assignment or Delegation by Originator......................................................... 12-4
SECTION 12.07 Amendment...................................................................................... 12-4
SECTION 12.08 Notices........................................................................................ 12-6
SECTION 12.09 Merger and Integration......................................................................... 12-8
SECTION 12.10 Headings....................................................................................... 12-8
SECTION 12.11 Governing Law.................................................................................. 12-8
iii
TABLE OF CONTENTS
(continued)
Page
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EXHIBIT A-1 -- Form of Class A Certificate....................................................... A-1-1
EXHIBIT A-2 -- Form of Class A-IO Certificate.................................................... A-2-1
EXHIBIT B -- Form of Class M-[1][2] Certificate................................................ B-1
EXHIBIT C-1 -- Form of Class B-[1][2] Certificate................................................ C-1-1
EXHIBIT C-2 -- Form of Class B-3I Certificate.................................................... C-2-1
EXHIBIT D -- Form of Assignment................................................................ D-1
EXHIBIT E -- Form of Certificate of Officer.................................................... E-1
EXHIBIT F -- Form of Opinion of Counsel........................................................ F-1
EXHIBIT G -- Form of Trustee's Acknowledgement................................................. G-1
EXHIBIT H -- Form of Custodian's Acknowledgement............................................... H-1
EXHIBIT I -- Form of Certificate of Servicing Officer.......................................... I-1
EXHIBIT J -- Form of Class C [Subsidiary][Intermediate][Master] Certificate.................... J-1
EXHIBIT K -- [RESERVED]
EXHIBIT L-1 -- Form of Certificate Regarding Repurchased Contracts............................... ▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇ -- ▇▇▇▇ of Certificate Regarding Substituted Contracts............................... L-2-1
EXHIBIT M -- Form of Representation Letter..................................................... M-1
EXHIBIT N -- Form of Monthly Report............................................................ N-1
EXHIBIT O -- Form of Addition Notice........................................................... O-1
EXHIBIT P -- Form of Subsequent Transfer Instrument............................................ P-1
EXHIBIT Q -- Form of Officer's Certificate (Subsequent Transfer)............................... Q-1
iv
AGREEMENT, dated as of March 1, 2001, among Conseco Finance Securitizations
Corp., a corporation organized and existing under the laws of the State of
Minnesota, as Seller (the "Seller"), Conseco Finance Corp., a corporation
organized and existing under the laws of the State of Delaware, as originator of
the manufactured housing installment sales contracts and installment loan
agreements described herein (the "Originator"), and as the initial servicer (the
"Servicer") and U.S. Bank National Association, a national banking association,
not in its individual capacity but solely as Trustee (the "Trustee").
WHEREAS, in the regular course of its business, Conseco Finance Corp.
originates, purchases and services manufactured housing installment sales
contracts and installment loan agreements, which contracts provide for
installment payments by or on behalf of the owner of the manufactured home and
grant security interests in the related manufactured home (or, in certain cases,
mortgages or deeds of trust on the real estate to which such manufactured home
is deemed permanently affixed);
WHEREAS, the Seller, the Originator, the Servicer, and the Trustee wish to
set forth the terms and conditions pursuant to which the "Trust," as hereinafter
defined, will acquire the "Contracts," as hereinafter defined, and the Servicer
will manage and service the Contracts;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
hereinafter set forth, the parties hereto agree as provided herein:
1
ARTICLE I
DEFINITIONS
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SECTION 1.01 General.
-------
For the purpose of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires, the terms defined in this Article
include the plural as well as the singular, the words "herein," "hereof" and
"hereunder" and other words of similar import refer to this Agreement as a whole
and not to any particular Article, Section or other subdivision, and Section
references refer to Sections of the Agreement.
SECTION 1.02 Specific Terms.
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"Addition Notice" means, with respect to each transfer of Subsequent
---------------
Contracts to the Trust pursuant to Section 2.03 of this Agreement, a notice,
substantially in the form of Exhibit O, which shall be given not less than five
Business Days prior to the related Subsequent Transfer Date, of the Seller's
designation of Subsequent Contracts to be sold to the Trust and the aggregate
Cut-off Date Principal Balances of such Subsequent Contracts.
"Additional Contract" means a Contract identified in the List of Contracts
-------------------
delivered pursuant to Section 2.02(a) that is not an Initial Contract.
"Additional Monthly Servicing Fee" means, as of any Remittance Date, a
--------------------------------
maximum of one-twelfth of the product of 0.50% and the Pool Scheduled Principal
Balance for the immediately preceding Remittance Date.
"Additional Principal Distribution Amount" means, as to any Remittance
----------------------------------------
Date, the Amount Available remaining after payment of the amounts described in
clauses (1) through (12) of Section 8.03(a), subject to the limitations and
conditions specified in Section 8.03(a)(13).
"Adjusted Amount Available" means, as to any Remittance Date, the sum of
-------------------------
the Amount Available and any amount withdrawn from the Capitalized Interest
Account, Pre-Funding Account or Staged-Funding Contract Reserve Account and
deposited in the Certificate Account on such Remittance Date.
"Adjusted Weighted Average Contract Rate" means, for any Remittance Date, a
---------------------------------------
fraction expressed as a percentage, (a) the numerator of which is the sum of (i)
the Weighted Average Contract Rate multiplied by the Subsidiary Interest
Adjusted Principal Balance of the Class S-1 Interest and (ii) the Weighted
Average Contract Rate less (A) 2.50% (two hundred fifty basis points),
multiplied by the sum of the Subsidiary Interest Adjusted Principal Balance of
the (1) Class S-2(1) Interest through and including the July 2001 Remittance
Date, (2) Class S-2(2) Interest through and including the October 2001
Remittance Date, (3) Class S-2(3) Interest through and including the January
2002 Remittance Date, (4) Class S-2(4) Interest through and including the April
2002 Remittance Date, (5) Class S-2(5) Interest through and including the July
2002 Remittance Date, (6) Class S-2(6) Interest through and including the
October 2002 Remittance Date, (7) Class S-2(7) Interest through and including
the January 2003 Remittance Date, (8) Class S-2(8) Interest through and
including the April 2003 Remittance Date, (9) Class
1-1
S-2(9) Interest through and including the July 2003 Remittance Date, (10) Class
S-2(10) Interest through and including the October 2003 Remittance Date, (11)
Class S-2(11) Interest through and including the January 2004 Remittance Date,
(12) Class S-2(12) Interest through and including the April 2004 Remittance
Date, (13) Class S-2(13) Interest through and including the July 2004 Remittance
Date, (14) Class S-2(14) Interest through and including the October 2004
Remittance Date, (15) Class S-2(15) Interest through and including the January
2005 Remittance Date, (16) Class S-2(16) Interest through and including the
April 2005 Remittance Date, (17) Class S-2(17) Interest through and including
the July 2005 Remittance Date, (18) Class S-2(18) Interest through and including
the October 2005 Remittance Date, (19) Class S-2(19) Interest through and
including the January 2006 Remittance Date, (20) Class S-2(20) Interest through
and including the April 2006 Remittance Date, (21) Class S-2(21) Interest
through and including the July 2006 Remittance Date, (22) Class S-2(22) Interest
through and including the October 2006 Remittance Date and (23) Class S-2(23)
Interest through and including the January 2007 Remittance Date, and (B) 0%
after the January 2007 Remittance Date and (b) the denominator of which is the
sum of the Subsidiary Interest Adjusted Principal Balance of the Class S-1 and
Class S-2 Interests.
"Advance Payment" means any payment by an Obligor in advance of the related
---------------
Due Period in which it would be due under such Contract and which payment is not
a Principal Prepayment.
"Affiliate" of any specified Person means any other Person controlling or
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controlled by or under common control with such specified Person. For the
purposes of this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" or "controlled" have meanings
correlative to the foregoing.
"Agreement" means this Pooling and Servicing Agreement, as the same may be
---------
amended or supplemented from time to time.
"Amount Available" means, as to any Remittance Date, an amount equal to
----------------
(a) the sum of
(i) the amount on deposit in the Certificate Account as of the
close of business on the last day of the related Due Period,
(ii) any amounts required to be deposited in the Certificate Account
on the Business Day immediately preceding such Remittance Date
pursuant to Section 5.09(b), and
(iii) all collections in respect of principal on the Contracts
received after the last day of the related Due Period up to and
including the third Business Day prior to such Remittance Date
(but in no event later than the 25th day of the month prior to
such Remittance Date), minus
1-2
(b) the sum as of the close of business on the Business Day preceding such
Remittance Date of
(i) the Amount Held for Future Distribution,
(ii) amounts permitted to be withdrawn by the Trustee from the
Certificate Account pursuant to clauses (b) - (e), inclusive,
of Section 8.02, and
(iii) with respect to all Remittance Dates other than the Remittance
Date in May 2001, all collections in respect of principal on
the Contracts received on or after the first day of the related
Due Period up to and including the third Business Day prior to
the preceding Remittance Date (but in no event later than the
25th day of the month prior to the preceding Remittance Date).
"Amount Held for Future Distribution" means, as to any Remittance Date, the
-----------------------------------
total of the amounts held in the Certificate Account on the last day of the
related Due Period on account of Advance Payments in respect of such related Due
Period (not including any portion of Advance Payments received during such
related Due Period that was distributed on the prior Remittance Date pursuant to
clause (vi) of the definition of "Formula Principal Distribution Amount").
"Applicants" has the meaning assigned in Section 9.06.
----------
"Appraised Value" means, with respect to any Manufactured Home, the value
---------------
of such Manufactured Home as determined by a professional appraiser (who may be
an employee of the Originator).
"Assumption Fee" means any assumption or other similar fee paid by the
--------------
Obligor on a Contract.
"Auction Date" has the meaning assigned in Section 8.05(e).
------------
"Authenticating Agent" means any authenticating agent appointed pursuant to
--------------------
Section 9.07.
"Average Sixty-Day Delinquency Ratio" means the arithmetic average of the
-----------------------------------
Sixty-Day Delinquency Ratios for such Remittance Date and for the two
immediately preceding Remittance Dates.
"Book-Entry Certificate" means any Certificate registered in the name of
----------------------
the Depository or its nominee ownership of which is reflected on the books of
the Depository or on the books of a person maintaining an account with such
Depository (directly or as an indirect participant in accordance with the rules
of such Depository).
"Business Day" means any day other than (a) a Saturday or a Sunday, or (b)
------------
another day on which banking institutions in the city in which a Person is
taking action hereunder are authorized or obligated by law, executive order or
governmental decree to be closed.
1-3
"Calculation Agent" means the Person who establishes LIBOR with respect to
-----------------
each Interest Reset Period. The Calculation Agent shall be the Trustee unless
the Trustee is unable or unwilling so to act, in which case the Calculation
Agent shall be a financial institution appointed by the Seller.
"Capitalized Interest Account" means the account established and maintained
----------------------------
pursuant to Section 8.06.
"Certificates" means the Class A, Class M, Class B, Class B-3I, and Class C
------------
Certificates, collectively.
"Certificate Account" means the account established and maintained pursuant
-------------------
to Section 5.05.
"Certificate Owner" means the person who is the beneficial owner of a Book-
-----------------
Entry Certificate.
"Certificate Register" means the register maintained pursuant to Section
--------------------
9.02.
"Certificate Registrar" or "Registrar" means the registrar appointed
--------------------- ---------
pursuant to Section 9.02.
"Certificateholder" or "Holder" means the person in whose name a
----------------- ------
Certificate is registered on the Certificate Register, except that, solely for
the purposes of giving any consent, waiver, request or demand pursuant to this
Agreement, any Regular Certificate registered in the name of the Originator or
the Seller or any of their Affiliates shall be deemed not to be outstanding and
the Percentage Interest evidenced thereby shall not be taken into account in
determining whether the requisite Percentage Interest necessary to effect any
such consent, request, waiver or demand has been obtained; provided, however,
that, solely for the purpose of determining whether the Trustee is entitled to
rely upon any such consent, waiver, request or demand, only Regular Certificates
which the Trustee knows to be so owned shall be so disregarded.
"Class," "Class A," "Class M," "Class B," "Class B-3I" or "Class C" means
-----------------------------------------------------------------
pertaining to each Class of Class A Certificates, Class M Certificates, Class B
Certificates, Class B-3I Certificates and/or Class C Certificates, as the case
may be.
"Class A Certificate" means any one of the Class A-1A, Class A-1B, Class A-
-------------------
2, Class A-3, Class A-4, Class A-5 and Class A-IO Certificates executed and
delivered by the Trustee substantially in the form set forth in Exhibit A-1 and
Exhibit A-2, respectively, and evidencing an interest designated as a "regular
interest" in the Master REMIC for purposes of the REMIC Provisions.
"Class A-5 Cross-Over Date" means the Remittance Date on which the Class A-
-------------------------
5 Principal Balance (after giving effect to the distributions of principal on
the Class A-5 Certificates on such Remittance Date) is reduced to zero.
1-4
"Class A Distribution Amount" means, as to any Remittance Date, the lesser
---------------------------
of (a) the Adjusted Amount Available for such Remittance Date (less any amounts
paid to the Servicer pursuant to Section 8.03(a)(1)) and (b) the Class A Formula
Distribution Amount for such Remittance Date; provided that after the A-5 Cross-
Over Date the Class A Distribution Amount shall be zero.
"Class A Formula Distribution Amount" means, as to any Remittance Date, an
-----------------------------------
amount equal to the sum of (a) one month's interest (or as to the first
Remittance Date, interest from and including the Closing Date to but excluding
the first Remittance Date) (calculated in the manner specified in Section 1.03)
at (i) the Class A-1A Remittance Rate on the Class A-1A Principal Balance, (ii)
the Class A-1B Remittance Rate on the Class A-1B Principal Balance, (iii) the
Class A-2 Remittance Rate on the Class A-2 Principal Balance, (iv) the Class A-3
Remittance Rate on the Class A-3 Principal Balance, (v) the Class A-4 Remittance
Rate on the Class A-4 Principal Balance, (vi) the Class A-5 Remittance Rate on
the Class A-5 Principal Balance and (vii) the Class A-IO Remittance Rate on the
Class A-IO Notional Principal Amount, (b) the aggregate Unpaid Class A Interest
Shortfall, if any, (c) the Class A Percentage of the Formula Principal
Distribution Amount, (d) any Unpaid Class A Principal Shortfall and (e) any
Additional Principal Distribution Amount to be distributed to the Class A
Certificates pursuant to Section 8.03(a)(13); provided, however, that the
aggregate of all amounts distributed for all Remittance Dates pursuant to
clauses (c), (d) and (e) shall not exceed the sum of the Original Principal
Balance of each Class of Class A Certificates.
"Class A Interest Distribution Amount" means, as to each Class of Class A
------------------------------------
Certificates and any Remittance Date, the sum of the amounts specified in clause
(a)(i), (a)(ii), (a)(iii), (a)(iv), (a)(v), (a)(vi) and (a)(vii), as applicable,
of the definition of the term "Class A Formula Distribution Amount" plus the
Unpaid Class A Interest Shortfall, if any, with respect to such Class.
"Class A Interest Shortfall" means, as to any Remittance Date and with
--------------------------
respect to each Class of Class A Certificates, the amount, if any, by which the
amount distributed to Holders of such Class of Class A Certificates on such
Remittance Date pursuant to Section 8.03(a)(2) is less than the Class A Interest
Distribution Amount for such Class.
"Class A Percentage" means, as to any Remittance Date, a fraction,
------------------
expressed as a percentage, the numerator of which is the Class A Principal
Balance and the denominator of which is the sum of (a) the Class A Principal
Balance, (b) if the Class M-1 Distribution Test is satisfied, the Class M-1
Principal Balance (minus the Unpaid Class M-1 Principal Shortfall, if any),
otherwise zero, (c) if the Class M-2 Distribution Test is satisfied, the Class
M-2 Principal Balance (minus the Unpaid Class M-2 Principal Shortfall, if any),
otherwise zero, and (d) if the Class B Distribution Test is satisfied, the sum
of the Class B Principal Balance (minus the Unpaid Class B-1 Principal
Shortfall, if any, and the Unpaid Class B-2 Principal Shortfall, if any) and the
Overcollateralization Amount, otherwise zero.
"Class A Principal Balance" means, as to any Remittance Date, the sum of
-------------------------
the Class Principal Balances of the Class A Certificates.
1-5
"Class A Principal Deficiency Amount" means, as to any Remittance Date, the
-----------------------------------
amount, if any, by which the Pool Scheduled Principal Balance plus any Pre-
Funded Amount is less than the Class A Principal Balance.
"Class A Principal Shortfall" means, as to any Remittance Date, the amount,
---------------------------
if any, by which the amount distributed to Holders of Class A Certificates on
such Remittance Date pursuant to Section 8.03(a)(6)(i) or (iii) is less than the
Class A Percentage of the Formula Principal Distribution Amount for such
Remittance Date. In no event, however, shall the Class A Principal Shortfall
exceed the Class A Principal Balance.
"Class A-1A Remittance Rate" means a floating rate per annum equal to the
--------------------------
lesser of (a) one-month LIBOR plus 0.13%, and (b) the Adjusted Weighted Average
Contract Rate.
"Class A-1B Remittance Rate" means 5.010% per annum.
--------------------------
"Class A-2 Remittance Rate" means 5.245% per annum.
-------------------------
"Class A-3 Remittance Rate" means 5.655% per annum.
-------------------------
"Class A-4 Remittance Rate" means 6.210% per annum.
-------------------------
"Class A-5 Remittance Rate" means a floating rate per annum (determined
-------------------------
each Due Period as of each Remittance Date) equal to the Adjusted Weighted
Average Contract Rate, but in no event greater than (i) for each Remittance Date
prior to and including the first Remittance Date on which the Pool Scheduled
Principal Balance is equal to or less than 20% of the Cut-off Date Pool
Principal Balance, 6.990% per annum, and (ii) for each Remittance Date after the
first Remittance Date on which the Pool Scheduled Principal Balance is equal to
or less than 20% of the Cut-off Date Pool Principal Balance, 7.490% per annum.
"Class A-IO Certificate" means any one of the Class A-IO Certificates
----------------------
executed and delivered by the Trustee and authenticated by the Certificate
Registrar substantially in the form set forth in Exhibit A-2 and evidencing an
interest designated as a "regular interest" in the Master REMIC for purposes of
the REMIC Provisions.
"Class A-IO Distribution Amount" means, for any Remittance Date, that
------------------------------
portion of the Class A Distribution Amount to be distributed to the Class A-IO
Certificateholders pursuant to Section 8.03(a) on such Payment Date.
"Class A-IO Notional Principal Amount" means, for any Remittance Date, an
------------------------------------
amount equal to (a) through and including the Remittance Date in January 2007,
the lesser of (i) the Notional Principal Amount, and (ii) the sum of the
aggregate Principal Balance of the Contracts and the amount on deposit in the
Pre-Funding Account on that Remittance Date and (b) thereafter, zero.
"Class B-1 Adjusted Principal Balance" means, as of any Remittance Date,
------------------------------------
the Class B-1 Principal Balance as of that Remittance Date minus the Class B-1
Liquidation Loss Amount (if any) as of the prior Remittance Date.
1-6
"Class B Certificate" means any one of the Class B-1 or Class B-2
-------------------
Certificates.
"Class B-1 Certificate" means any one of the Class B-1 Certificates
---------------------
executed and delivered by the Trustee substantially in the form set forth in
Exhibit C-1 hereto and evidencing an interest designated as a "regular interest"
in the Master REMIC for purposes of the REMIC Provisions.
"Class B-2 Certificate" means any one of the Class B-2 Certificates
---------------------
executed and delivered by the Trustee substantially in the form set forth in
Exhibit C-1 hereto and evidencing an interest designated as a "regular interest"
in the Master REMIC for purposes of the REMIC Provisions.
"Class B-1 Cross-Over Date" means the Remittance Date on which the Class B-
-------------------------
1 Principal Balance (after giving effect to the distributions of principal on
the Class B-1 Certificates on such Remittance Date) is reduced to zero.
"Class B-1 Distribution Amount" means, as to any Remittance Date, the
-----------------------------
lesser of (a) the Adjusted Amount Available less the sum of (i) any amounts paid
to the Servicer pursuant to Section 8.03(a)(1), (ii) the Class A Distribution
Amount, (iii) the Class M-1 Distribution Amount, and (iv) the Class M-2
Distribution Amount and (b) the Class B-1 Formula Distribution Amount for such
Remittance Date; provided that after the Class B-1 Cross-Over Date the Class B-1
Distribution Amount shall be zero.
"Class B-2 Distribution Amount" means, as to any Remittance Date, the
-----------------------------
lesser of (a) the Remaining Amount Available and (b) the Class B-2 Formula
Distribution Amount for such Remittance Date.
"Class B Distribution Test" means, to be considered "satisfied" for any
-------------------------
Remittance Date, that (i) such Remittance Date occurs in or after May 2005; (ii)
the Average Sixty-Day Delinquency Ratio for such Remittance Date is less than or
equal to 6.25%; (iii) the Cumulative Realized Losses Test for such Remittance
Date is satisfied; (iv) the Current Realized Loss Ratio for such Remittance Date
is less than or equal to 3.50%; (v) the fraction, expressed as a percentage, the
numerator of which is the sum of the Class B Principal Balance and the
Overcollateralization Amount as of such Remittance Date and the denominator of
which is the Pool Scheduled Principal Balance as of the immediately preceding
Remittance Date, is equal to or greater than 14.25%; and (vi) the Class B
Principal Balance as of such Remittance Date is greater than or equal to
$12,000,000.
"Class B-1 Formula Distribution Amount" means, as to any Remittance Date,
-------------------------------------
an amount equal to the sum of (a) one month's interest (or as to the first
Remittance Date, interest from and including the Closing Date to but excluding
the first Remittance Date) (calculated in the manner specified in Section 1.03)
at the Class B-1 Remittance Rate on the Class B-1 Adjusted Principal Balance as
of such Remittance Date, (b) any Unpaid Class B-1 Interest Shortfall, (c) the
Class B Percentage of the Formula Principal Distribution Amount, (d) any Unpaid
Class B-1 Principal Shortfall, (e) any Additional Principal Distribution Amount
to be distributed to the Class B-1 Certificates pursuant to Section 8.03(a)(13),
(f) any Class B-1 Liquidation Loss Interest Amount, and (g) any Unpaid Class B-1
Liquidation Loss Interest Shortfall; provided, however, that on the
1-7
Class M-2 Cross-Over Date, the balance of any amounts that would have been
distributable on such date pursuant to clauses (c), (d) and (e) of the term
"Class M-2 Formula Distribution Amount" (assuming a sufficient Amount Available)
but for the operation of the second proviso to such term shall instead be
included in clause (c) or (e) of this definition, as applicable; provided,
further, that the aggregate of all amounts distributed pursuant to clauses (c),
(d) and (e) of this definition shall not exceed the Original Class B-1 Principal
Balance.
"Class B-2 Formula Distribution Amount" means, as to any Remittance Date,
-------------------------------------
an amount equal to the sum of (a) one month's interest (or as to the first
Remittance Date, interest from and including the Closing Date to but excluding
the first Remittance Date) (calculated in the manner specified in Section 1.03)
at the Class B-2 Remittance Rate on the Class B-2 Principal Balance as
calculated immediately prior to such Remittance Date, (b) any Unpaid Class B-2
Interest Shortfall, (c) (i) if such Remittance Date is prior to or on the Class
B-1 Cross-Over Date, zero or (ii) if such Remittance Date is after the Class B-1
Cross-Over Date, the Class B Percentage of the Formula Principal Distribution
Amount, (d) any Unpaid Class B-2 Principal Shortfall, and (e) any Additional
Principal Distribution Amount to be distributed to the Class B-2 Certificates
pursuant to Section 8.03(a)(13); provided, however, that on the Class B-1 Cross-
Over Date, the balance of any amounts that would have been distributable on such
date pursuant to clauses (c), (d) and (e) of the term "Class B-1 Formula
Distribution Amount" (assuming a sufficient Remaining Amount Available) but for
the operation of the second proviso to such term shall instead be included in
clause (c) or (e) of this definition, as applicable; provided, further, that the
aggregate of all amounts distributed pursuant to clauses (c), (d) and (e) of
this definition shall not exceed the Original Class B-2 Principal Balance.
"Class B-1 Interest Deficiency Amount" means, as to the Class B-1
------------------------------------
Certificates and any Remittance Date, the difference, if any, between (i) the
sum of the amounts described in clauses (a), (b), (f) and (g) of the definition
of the term "Class B-1 Formula Distribution Amount" and (ii) the amount
available for distribution to the Class B-1 Certificateholders pursuant to
Section 8.03(a)(5)(i) and (ii) and Section 8.03(a)(9)(iii) and (iv) on such
Remittance Date.
"Class B-1 Interest Distribution Amount" means, as to any Remittance Date,
--------------------------------------
the amount specified in clause (a) of the definition of "Class B-1 Formula
Distribution Amount" plus the Unpaid Class B-1 Interest Shortfall, if any.
"Class B-1 Interest Shortfall" means, as to any Remittance Date, the
----------------------------
difference, if any, between (A) the sum of (i) the amount distributed to Holders
of the Class B-1 Certificates on such Remittance Date pursuant to Sections
8.03(a)(5)(i) and (ii), and (ii) any amount distributed to the Holders of the
Class B-1 Certificates pursuant to Section 8.03(d) on such Remittance Date, and
(B) the Class B-1 Interest Distribution Amount for such Remittance Date.
"Class B-2 Interest Shortfall" means, as to any Remittance Date, the
----------------------------
amount, if any, by which the amount distributed to Holders of Class B-2
Certificates on such Remittance Date pursuant to Sections 8.03(a)(10)(i) and
(ii) is less than the sum of the amounts specified in clauses (a) and (b) of the
definition of the term "Class B-2 Formula Distribution Amount."
"Class B-1 Liquidation Loss Amount" means, as of any Remittance Date, the
---------------------------------
lesser of (x) the amount, if any, by which the sum of the Class A Principal
Balance, the Class M-1
1-8
Principal Balance, the Class M-2 Principal Balance and the Class B-1 Principal
Balance for such Remittance Date exceeds the sum of the Pre-Funded Amount plus
the Pool Scheduled Principal Balance for such Remittance Date (after giving
effect to all distributions of principal on the Class A, Class M-1, Class M-2
and Class B-1 Certificates on such Remittance Date) and (y) the Class B-1
Principal Balance (after giving effect to all distributions of principal on the
Class B-1 Certificates on such Remittance Date).
"Class B-2 Liquidation Loss Amount" means, as to any Remittance Date, the
---------------------------------
lesser of (x) the amount, if any, by which the sum of the Class A Principal
Balance, the Class M-1 Principal Balance, the Class M-2 Principal Balance, the
Class B-1 Principal Balance and the Class B-2 Principal Balance for such
Remittance Date exceeds the sum of the Pre-Funded Amount plus the Pool Scheduled
Principal Balance for such Remittance Date (after giving effect to all
distributions of principal on the Class A, Class M-1, Class M-2, Class B-1 and
Class B-2 Certificates on such Remittance Date) and (y) the Class B-2 Principal
Balance (after giving effect to all distributions of principal on the Class B-2
Certificates on such Remittance Date).
"Class B-1 Liquidation Loss Interest Amount" means, as to any Remittance
------------------------------------------
Date, an amount equal to interest (calculated in the manner specified in Section
1.03) at the Class B-1 Remittance Rate on the Class B-1 Liquidation Loss Amount
(if any) for the immediately preceding Remittance Date.
"Class B-1 Liquidation Loss Interest Shortfall" means, as to any Remittance
---------------------------------------------
Date, the amount, if any, by which the amount distributed to Holders of the
Class B-1 Certificates on such Remittance Date pursuant to Section
8.03(a)(9)(iii) is less than the Class B-1 Liquidation Loss Interest Amount for
such Remittance Date.
"Class B Percentage" means:
(i) as to any Remittance Date on which the Class B Distribution Test is
not satisfied and the Class A Principal Balance, the Class M-1
Principal Balance and the Class M-2 Principal Balance have not been
reduced to zero, 0%, and
(ii) as to any other Remittance Date, a fraction, expressed as a
percentage, the numerator of which is the sum of the Class B
Principal Balance and the Overcollateralization Amount and the
denominator of which is the sum of (a) the Class A Principal
Balance, (b) the Class M-1 Principal Balance (minus the Unpaid
Class M-1 Principal Shortfall, if any), (c) the Class M-2 Principal
Balance (minus the Unpaid Class M-2 Principal Shortfall, if any)
and (d) the sum of the Class B Principal Balance (minus the Unpaid
Class B-1 Principal Shortfall, if any, and the Unpaid Class B-2
Principal Shortfall, if any) and the Overcollateralization Amount.
"Class B Principal Balance" means, as to any Remittance Date, the sum of
-------------------------
the Class B-1 Principal Balance and the Class B-2 Principal Balance.
"Class B-1 Principal Balance" means, as to any Remittance Date, the
---------------------------
Original Principal Balance of the Class B-1 Certificates less all amounts
previously distributed to Holders of Class B-1 Certificates on account of
principal.
1-9
"Class B-2 Principal Balance" means, as to any Remittance Date, the
---------------------------
Original Principal Balance of the Class B-2 Certificates less all amounts
previously distributed to Holders of Class B-2 Certificates on account of
principal.
"Class B-1 Principal Shortfall" means, as to any Remittance Date, the
-----------------------------
amount, if any, by which the amount distributed to Holders of Class B-1
Certificates on such Remittance Date pursuant to Section 8.03(a)(9)(ii) is less
than the Class B Percentage of the Formula Principal Distribution Amount for
such Remittance Date. In no event, however, shall the Class B-1 Principal
Shortfall exceed the Class B-1 Principal Balance.
"Class B-2 Principal Shortfall" means, as to any Remittance Date, the
-----------------------------
amount, if any, by which the amount distributed to Holders of Class B-2
Certificates on such Remittance Date pursuant to Section 8.03(a)(10)(iv) is less
than the amount described in Section 8.03(a)(10)(iv) for such Remittance Date.
In no event, however, shall the Class B-2 Principal Shortfall exceed the Class
B-2 Principal Balance.
"Class B-1 Remittance Rate" means a floating rate (determined each Due
-------------------------
Period as of each Remittance Date) equal to the Adjusted Weighted Average
Contract Rate, but in no event greater than 8.915% per annum.
"Class B-2 Remittance Rate" means a floating rate (determined each Due
-------------------------
Period as of each Remittance Date) equal to the Adjusted Weighted Average
Contract Rate, but in no event greater than 11.250% per annum.
"Class B-3I Certificate" means any one of the Class B-3I Certificates
----------------------
executed and delivered by the Trustee substantially in the form set forth in
Exhibit C-2 hereto and evidencing an interest designated as a "regular interest"
in the Master REMIC for purposes of the REMIC Provisions.
"Class B-3I Distribution Amount" means, as to any Remittance Date, an
------------------------------
amount equal to the sum of (a) the Class B-3I Formula Distribution Amount for
such Remittance Date less (b) any amount distributed on that Remittance Date
under Section 8.03(a)(13) plus (c) on the Remittance Date on which the Class
Principal Balance of the Certificates is reduced to zero, the excess of the Pool
Scheduled Principal Balance over the aggregate Class Principal Balance of the
Certificates on such Remittance Date, plus (d) the amount, if any, by which the
Class B-3I Distribution Amount on the preceding Remittance Date exceeds the
amount actually distributed to the Class B-3I Certificates on that Remittance
Date.
"Class B-3I Formula Distribution Amount" means, as to any Remittance Date,
--------------------------------------
an amount equal to the product of (a) the Class B-3I Remittance Rate for such
Remittance Date and (b) the Class B-3I Notional Amount.
"Class B-3I Notional Amount" means $600,000,000 for the first Remittance
---------------------------
Date and, for any other Remittance Date, the sum of the Pool Scheduled Principal
Balance and the Pre-Funded Amount as of the immediately preceding Remittance
Date.
"Class B-3I Remittance Rate" means the excess of (a) the Adjusted Weighted
--------------------------
Average Contract Rate over (b) the product of (i) two and (ii) the weighted
average Remittance Rate of
1-10
the Class I-Accrual Interest and the Intermediate REMIC Accretion Directed
Interests, provided that for this purpose the Remittance Rate for the Class I-
Accrual Interest shall not exceed zero and the Remittance Rate for each
Intermediate REMIC Accretion Directed Interest shall not exceed the Remittance
Rate on its Corresponding Certificate Class.
"Class C Certificate" means any one of the Class C Subsidiary Certificate,
-------------------
Class C Intermediate Certificate or Class C Master Certificate.
"Class C Certificateholder" means the person in whose name a Class C
-------------------------
Certificate is registered on the Certificate Register.
"Class C Intermediate Certificate" means a Class C Intermediate Certificate
--------------------------------
executed and delivered by the Trustee substantially in the form of Exhibit J,
and evidencing an interest designated as the "residual interest" in the
Intermediate REMIC for purposes of the REMIC Provisions.
"Class C Intermediate Distribution Amount" means, as to any Remittance
----------------------------------------
Date, the amount, if any, distributable pursuant to Section 8.03(b)(3).
"Class C Master Certificate" means a Class C Master Certificate executed
--------------------------
and delivered by the Trustee substantially in the form of Exhibit J, and
evidencing an interest designated as the "residual interest" in the Master REMIC
for purposes of the REMIC Provisions.
"Class C Master Distribution Amount" means, as to any Remittance Date, the
----------------------------------
amount, if any, distributable pursuant to Section 8.03(a)(16).
"Class C Subsidiary Certificate" means a Class C Subsidiary Certificate
------------------------------
executed and delivered by the Trustee substantially in the form of Exhibit J,
and evidencing an interest designated as the "residual interest" in the
Subsidiary REMIC for purposes of the REMIC Provisions.
"Class C Subsidiary Distribution Amount" means, as to any Remittance Date,
--------------------------------------
the amount, if any, distributable pursuant to Section 8.03(c)(3).
"Class I-A1A Interest", "Class I-A1B Interest", "Class I-A2 Interest",
"Class I-A3 Interest", "Class I-A4 Interest", "Class I-A5 Interest", "Class I-
AIO Interest", "Class I-B1 Interest", "Class I-B2 Interest" "Class I-M1
Interest" "Class I-M2 Interest" and "Class I-Accrual Interest" means,
respectively, a regular interest in the Intermediate REMIC which is held as an
asset of the Master REMIC, is entitled to monthly distributions as provided in
Section 8.03(b), and has the Original Principal Balance, and bears interest at
the Remittance Rate, specified in Section 2.05(c).
"Class M Certificate" means any one of the Class M-1 or M-2 Certificates
-------------------
executed and delivered by the Trustee.
"Class M-1 Adjusted Principal Balance" means, as to any Remittance Date,
------------------------------------
the Class M-1 Principal Balance as of that Remittance Date minus the Class M-1
Liquidation Loss Amount (if any) as of the prior Remittance Date.
1-11
"Class M-2 Adjusted Principal Balance" means, as to any Remittance Date,
------------------------------------
the Class M2 Principal Balance as of that Remittance Date minus the Class M-2
Liquidation Loss Amount (if any) as of the prior Remittance Date.
"Class M-1 Certificate" means any one of the Class M-1 Certificates
---------------------
executed and delivered by the Trustee substantially in the form set forth in
Exhibit B and evidencing an interest designated as a "regular interest" in the
Trust for the purposes of the REMIC Provisions.
"Class M-2 Certificate" means any one of the Class M-2 Certificates
---------------------
executed and delivered by the Trustee substantially in the form set forth in
Exhibit B and evidencing an interest designated as a "regular interest" in the
Trust for the purposes of the REMIC Provisions.
"Class M-1 Cross-Over Date" means the Remittance Date on which the Class M-
-------------------------
1 Principal Balance (after giving effect to the distributions of principal on
the Class M-1 Certificates on such Remittance Date) is reduced to zero.
"Class M-2 Cross-Over Date" means the Remittance Date on which the Class M-
-------------------------
2 Principal Balance (after giving effect to the distributions of principal on
the Class M-2 Certificates on such Remittance Date) is reduced to zero.
"Class M-1 Distribution Amount" means, as to any Remittance Date, the
-----------------------------
lesser of (a) the Adjusted Amount Available less the sum of (i) any amounts paid
to the Servicer pursuant to Section 8.03(a)(1) and (ii) the Class A Distribution
Amount and (b) the Class M-1 Formula Distribution Amount for such Remittance
Date; provided that after the Class M-1 Cross-Over Date the Class M-1
Distribution Amount shall be zero.
"Class M-2 Distribution Amount" means, as to any Remittance Date, the
-----------------------------
lesser of (a) the Adjusted Amount Available less the sum of (i) any amounts paid
to the Servicer pursuant to Section 8.03(a)(1), (ii) the Class A Distribution
Amount, and (iii) the Class M-1 Distribution Amount and (b) the Class M-2
Formula Distribution Amount for such Remittance Date; provided that after the
Class M-2 Cross-Over Date the Class M-2 Distribution Amount shall be zero.
"Class M-1 Distribution Test" means, to be considered "satisfied" for any
---------------------------
Remittance Date, that (i) such Remittance Date occurs in or after May 2005; (ii)
the Average Sixty-Day Delinquency Ratio for such Remittance Date is less than or
equal to 6.25%; (iii) the Cumulative Realized Losses Test for such Remittance
Date is satisfied; (iv) the Current Realized Loss Ratio for such Remittance Date
is less than or equal to 3.50%; and (v) the fraction, expressed as a percentage,
the numerator of which is the sum of the Class M-1 Principal Balance, the Class
M-2 Principal Balance, the Class B Principal Balance and the
Overcollateralization Amount as of such Remittance Date and the denominator of
which is the Pool Scheduled Principal Balance as of the immediately preceding
Remittance Date, is equal to or greater than 30.75%.
"Class M-2 Distribution Test" means, to be considered "satisfied" for any
---------------------------
Remittance Date, that (i) such Remittance Date occurs in or after May 2005; (ii)
the Average Sixty-Day Delinquency Ratio for such Remittance Date is less than or
equal to 6.25%; (iii) the Cumulative Realized Losses Test for such Remittance
Date is satisfied; (iv) the Current Realized Loss Ratio for such Remittance Date
is less than or equal to 3.50%; and (v) the fraction, expressed as a
1-12
percentage, the numerator of which is the sum of the Class M-2 Principal
Balance, the Class B Principal Balance and the Overcollateralization Amount as
of such Remittance Date and the denominator of which is the Pool Scheduled
Principal Balance as of the immediately preceding Remittance Date, is equal to
or greater than 21.75%.
"Class M-1 Formula Distribution Amount" means, as to any Remittance Date,
-------------------------------------
an amount equal to the sum of (a) one month's interest (or as to the first
Remittance Date, interest from and including the Closing Date to but excluding
the first Remittance Date) (calculated in the manner specified in Section 1.03)
at the Class M-1 Remittance Rate on the Class M-1 Adjusted Principal Balance as
of such Remittance Date, (b) the aggregate Unpaid Class M-1 Interest Shortfall,
if any, (c) the Class M-1 Percentage of the Formula Principal Distribution
Amount, (d) any Unpaid Class M-1 Principal Shortfall, (e) any Additional
Principal Distribution Amount to be distributed to the Class M-1 Certificates
pursuant to Section 8.03(a)(13), (f) any Class M-1 Liquidation Loss Interest
Amount, and (g) any Unpaid Class M-1 Liquidation Loss Interest Shortfall;
provided, however, that on the Class A-5 Cross-Over Date, the balance of any
amounts that would have been distributable on such date pursuant to clauses (c),
(d) and (e) of the term "Class A Formula Distribution Amount" (assuming a
sufficient Amount Available) but for the operation of the proviso to such term
shall instead be included in clause (c) or (e) of this definition, as
applicable; provided, further, that the aggregate of all amounts distributed for
all Remittance Dates pursuant to clauses (c), (d) and (e) shall not exceed the
Original Class M-1 Principal Balance.
"Class M-2 Formula Distribution Amount" means, as to any Remittance Date,
-------------------------------------
an amount equal to the sum of (a) one month's interest (or as to the first
Remittance Date, interest from and including the Closing Date to but excluding
the first Remittance Date) (calculated in the manner specified in Section 1.03)
at the Class M-2 Remittance Rate on the Class M-2 Adjusted Principal Balance as
of such Remittance Date, (b) the aggregate Unpaid Class M-2 Interest Shortfall,
if any, (c) the Class M-2 Percentage of the Formula Principal Distribution
Amount, (d) any Unpaid Class M-2 Principal Shortfall, (e) any Additional
Principal Distribution Amount to be distributed to the Class M-2 Certificates
pursuant to Section 8.03(a)(13), (f) any Class M-2 Liquidation Loss Interest
Amount, and (g) any Unpaid Class M-2 Liquidation Loss Interest Shortfall;
provided, however, that on the Class M-1 Cross-Over Date, the balance of any
amounts that would have been distributable on such date pursuant to clauses (c),
(d) and (e) of the term "Class M-1 Formula Distribution Amount" (assuming a
sufficient Amount Available) but for the operation of the proviso to such term
shall instead be included in clause (c) or (e) of this definition, as
applicable; provided, further, that the aggregate of all amounts distributed for
all Remittance Dates pursuant to clauses (c), (d) and (e) shall not exceed the
Original Class M-2 Principal Balance.
"Class M-1 Interest Deficiency Amount" means, as to the Class M-1
------------------------------------
Certificates and any Remittance Date, the difference, if any, between (i) the
sum of the amounts described in clauses (a), (b), (f) and (g) of the definition
of the term "Class M-1 Formula Distribution Amount" and (ii) the amount
available for distribution to the Class M-1 Certificateholders pursuant to
Section 8.03(a)(3)(i) and (ii) and Section 8.03(a)(7)(iii) and (iv) on such
Remittance Date.
"Class M-2 Interest Deficiency Amount" means, as to the Class M-2
------------------------------------
Certificates and any Remittance Date, the difference, if any, between (i) the
sum of the amounts described in clauses (a), (b), (f) and (g) of the definition
of the term "Class M-2 Formula Distribution Amount" and
1-13
(ii) the amount available for distribution to the Class M-2 Certificateholders
pursuant to Section 8.03(a)(4)(i) and (ii) and Section 8.03(a)(8)(iii) and (iv)
on such Remittance Date.
"Class M-1 Interest Distribution Amount" means, as to any Remittance Date,
--------------------------------------
the amount specified in clause (a) of the definition of the term "Class M-1
Formula Distribution Amount" plus the Unpaid Class M-1 Interest Shortfall, if
any.
"Class M-2 Interest Distribution Amount" means, as to any Remittance Date,
--------------------------------------
the amount specified in clause (a) of the definition of the term "Class M-2
Formula Distribution Amount" plus the Unpaid Class M-2 Interest Shortfall, if
any.
"Class M-1 Interest Shortfall" means, as to any Remittance Date, the
----------------------------
difference, if any, between (A) the sum of (i) the amount distributed to Holders
of the Class M-1 Certificates on such Remittance Date pursuant to Section
8.03(a)(3)(i) and (ii), and (ii) any amount distributed to the Holders of the
Class M-1 Certificates pursuant to Section 8.03(d) on such Remittance Date, and
(B) the Class M-1 Interest Distribution Amount for such Remittance Date.
"Class M-2 Interest Shortfall" means, as to any Remittance Date, the
----------------------------
difference, if any, between (A) the sum of (i) the amount distributed to Holders
of the Class M-2 Certificates on such Remittance Date pursuant to Section
8.03(a)(4)(i) and (ii), and (ii) any amount distributed to the Holders of the
Class M-2 Certificates pursuant to Section 8.03(d) on such Remittance Date, and
(B) the Class M-2 Interest Distribution Amount for such Remittance Date.
"Class M-1 Liquidation Loss Amount" means, as to any Remittance Date, the
---------------------------------
lesser of (x) the amount, if any, by which the sum of the Class A Principal
Balance and the Class M-1 Principal Balance for such Remittance Date exceeds the
sum of the Pre-Funded Amount plus the Pool Scheduled Principal Balance for such
Remittance Date (after giving effect to all distributions of principal on the
Class A and Class M-1 Certificates on such Remittance Date) and (y) the Class M-
1 Principal Balance (after giving effect to all distributions of principal on
the Class M-1 Certificates on such Remittance Date).
"Class M-2 Liquidation Loss Amount" means, as to any Remittance Date, the
---------------------------------
lesser of (x) the amount, if any, by which the sum of the Class A Principal
Balance, the Class M-1 Principal Balance and the Class M-2 Principal Balance for
such Remittance Date exceeds the sum of the Pre-Funded Amount plus the Pool
Scheduled Principal Balance for such Remittance Date (after giving effect to all
distributions of principal on the Class A, Class M-1 and Class M-2 Certificates
on such Remittance Date) and (y) the Class M-2 Principal Balance (after giving
effect to all distributions of principal on the Class M-2 Certificates on such
Remittance Date).
"Class M-1 Liquidation Loss Interest Amount" means, as to any Remittance
------------------------------------------
Date, an amount equal to interest (calculated in the manner specified in Section
1.03) at the Class M-1 Remittance Rate on the Class M-1 Liquidation Loss Amount
(if any) for the immediately preceding Remittance Date.
"Class M-2 Liquidation Loss Interest Amount" means, as to any Remittance
------------------------------------------
Date, an amount equal to interest (calculated in the manner specified in Section
1.03) at the Class M-2 Remittance Rate on the Class M-2 Liquidation Loss Amount
(if any) for the immediately preceding Remittance Date.
1-14
"Class M-1 Liquidation Loss Interest Shortfall" means, as to any Remittance
---------------------------------------------
Date, the amount, if any, by which the amount distributed to Holders of the
Class M-1 Certificates on such Remittance Date pursuant to Section
8.03(a)(7)(iii) is less than the Class M-1 Liquidation Loss Interest Amount for
such Remittance Date.
"Class M-2 Liquidation Loss Interest Shortfall" means, as to any Remittance
---------------------------------------------
Date, the amount, if any, by which the amount distributed to Holders of the
Class M-2 Certificates on such Remittance Date pursuant to Section
8.03(a)(8)(iii) is less than the Class M-2 Liquidation Loss Interest Amount for
such Remittance Date.
"Class M-1 Percentage" means:
(i) as to any Remittance Date prior to the Class A-5 Cross-Over Date and
on which the Class M-1 Distribution Test is not satisfied, 0%, and
(ii) as to any Remittance Date after the Class A-5 Cross-Over Date or on
which the Class M-1 Distribution Test is satisfied, a fraction,
expressed as a percentage, the numerator of which is the Class M-1
Principal Balance (minus the Unpaid Class M-1 Principal Shortfall, if
any) and the denominator of which is the sum of (a) the Class A
Principal Balance, (b) the Class M-1 Principal Balance (minus the
Unpaid Class M-1 Principal Shortfall, if any), (c) if the Class M-2
Distribution Test is satisfied, the Class M-2 Principal Balance (minus
the Unpaid Class M-2 Principal Shortfall, if any), otherwise zero, and
(d) if the Class B Distribution Test is satisfied, the sum of the
Class B Principal Balance and the Overcollateralization Amount,
otherwise zero.
"Class M-2 Percentage" means:
(i) as to any Remittance Date prior to the Class M-1 Cross-Over Date and
on which the Class M-2 Distribution Test is not satisfied, 0%, and
(ii) as to any Remittance Date after the Class M-1 Cross-Over Date or on
which the Class M-2 Distribution Test is satisfied, a fraction,
expressed as a percentage, the numerator of which is the Class M-2
Principal Balance (minus the Unpaid Class M-2 Principal Shortfall, if
any) and the denominator of which is the sum of (a) the Class A
Principal Balance, (b) the Class M-1 Principal Balance (minus the
Unpaid Class M-2 Principal Shortfall, if any), (c) the Class M-2
Principal Balance (minus the Unpaid Class M-2 Principal Shortfall, if
any), and (d) if the Class B Distribution Test is satisfied, the sum
of the Class B Principal Balance (minus the Unpaid Class B-1 Principal
Shortfall, if any, and the Unpaid Class B-2 Principal Shortfall, if
any) and the Overcollateralization Amount, otherwise zero.
"Class M-1 Principal Balance" means, as to any Remittance Date, the
---------------------------
Original Principal Balance of the Class M-1 Certificates less all amounts
previously distributed to Holders of Class M-1 Certificates on account of
principal.
1-15
"Class M-2 Principal Balance" means, as to any Remittance Date, the
---------------------------
Original Principal Balance of the Class M-2 Certificates less all amounts
previously distributed to Holders of Class M-2 Certificates on account of
principal.
"Class M-1 Principal Shortfall" means, as to any Remittance Date, the
-----------------------------
amount, if any, by which the amount distributed to Holders of Class M-1
Certificates on such Remittance Date pursuant to Section 8.03(a)(7)(ii) is less
than the Class M-1 Percentage of the Formula Principal Distribution Amount for
such Remittance Date. In no event, however, shall the Class M-1 Principal
Shortfall exceed the Class M-1 Principal Balance.
"Class M-2 Principal Shortfall" means, as to any Remittance Date, the
-----------------------------
amount, if any, by which the amount distributed to Holders of Class M-2
Certificates on such Remittance Date pursuant to Section 8.03(a)(8)(ii) is less
than the Class M-2 Percentage of the Formula Principal Distribution Amount for
such Remittance Date. In no event, however, shall the Class M-2 Principal
Shortfall exceed the Class M-2 Principal Balance.
"Class M-1 Remittance Rate" means a floating rate (determined each Due
-------------------------
Period as of each Remittance Date) equal to the Adjusted Weighted Average
Contract Rate, but in no event greater than 7.535% per annum.
"Class M-2 Remittance Rate" means a floating rate (determined each Due
-------------------------
Period as of each Remittance Date) equal to the Adjusted Weighted Average
Contract Rate, but in no event greater than 7.970% per annum.
"Class of Uncertificated Intermediate Interests" means any one of the Class
----------------------------------------------
I-A1A, Class I-A1B, Class I-A2, Class I-A3, Class I-A4, Class I-A5, Class I-AIO,
Class I-M1, Class I-M2, Class I-B1, Class I-B2 and Class I-Accrual Interests.
"Class of Uncertificated Subsidiary Interests" means any one of the Class
--------------------------------------------
S-1 or Class S-2 Interests.
"Class Principal Balance" means, as to any Remittance Date and each Class
-----------------------
of Certificates, the Original Principal Balance of such Class less all amounts
previously distributed to Holders of such Class of Certificates on account of
principal.
"Class S-1 Interest", "Class S-2(1) Interest", "Class S-2(2) Interest",
"Class S-2(3) Interest", "Class S-2(4) Interest", Class S-2(5) Interest", "Class
S-2(6) Interest", "Class S-2(7) Interest", "Class S-2(8) Interest", "Class S-
2(9) Interest", Class S-2(10) Interest", "Class S-2(11) Interest", "Class S-
2(12) Interest", "Class S-2(13) Interest", "Class S-2(14) Interest", "Class S-
2(15) Interest", "Class S-2(16) Interest", "Class S-2(17) Interest", "Class S-
2(18) Interest", "Class S-2(19) Interest", "Class S-2(20) Interest", "Class S-
2(21) Interest", "Class S-2(22) Interest" and "Class S-2(23) Interest", means,
respectively, a regular interest in the Subsidiary REMIC which is held as an
asset of the Intermediate REMIC, is entitled to monthly distributions as
provided in Section 8.03(c), and has the Original Principal Balance and bears
interest at the Remittance Rate, specified in Section 2.05(d).
"Class S-2 Interest" means any one of the Class S-2(1) Interest, Class S-
------------------
2(2) Interest, Class S-2(3) Interest, Class S-2(4) Interest, Class S-2(5)
Interest, Class S-2(6) Interest, Class S-
1-16
2(7) Interest, Class S-2(8) Interest, Class S-2(9) Interest, Class S-2(10)
Interest, Class S-2(11) Interest, Class S-2(12) Interest, Class S-2(13)
Interest, Class S-2(14) Interest, Class S-2(15) Interest, Class S-2(16)
Interest, Class S-2(17) Interest, Class S-2(18) Interest, Class S-2(19)
Interest, Class S-2(20) Interest, Class S-2(21) Interest, Class S-2(22) Interest
and Class S-2(23) Interest.
"Closing Date" means March 29, 2001.
------------
"Code" means the Internal Revenue Code of 1986, as amended.
----
"Collateral Security" means, with respect to any Contract, (i) the security
-------------------
interests granted by or on behalf of the related Obligor with respect thereto,
including a first priority perfected security interest in the related
Manufactured Home, (ii) all other security interests or liens and property
subject thereto from time to time purporting to secure payment of such Contract,
whether pursuant to the agreement giving rise to such Contract or otherwise,
together with all financing statements signed by the Obligor describing any
collateral securing such Contract, (iii) all guarantees, insurance and other
agreements or arrangements of whatever character from time to time supporting or
securing payment of such Contract whether pursuant to the agreement giving rise
to such Contract or otherwise, and (iv) all records in respect of such Contract.
"Computer Tape" means the computer tape generated by the Originator which
-------------
provides information relating to the Contracts and which was used by the
Originator in selecting the Contracts, and includes the master file and the
history file.
"Contracts" means the manufactured housing installment sales contracts and
---------
installment loan agreements, including any Land-and-Home Contracts, described in
the List of Contracts and constituting part of the corpus of the Trust, which
Contracts are to be assigned and conveyed by the Seller to the Trust, and
includes, without limitation, all related security interests and any and all
rights to receive payments which are due pursuant thereto after the applicable
Cut-off Date, but excluding any rights to receive payments which are due
pursuant thereto on or before the applicable Cut-off Date.
"Contract File" means, as to each Contract, other than a Land-and-Home
-------------
Contract, (a) the original copy of the Contract, (b) either (i) the original
title document for the related Manufactured Home or a duplicate certified by the
appropriate governmental authority which issued the original thereof or the
application for such title document or (ii) if the laws of the jurisdiction in
which the related Manufactured Home is located do not provide for the issuance
of title documents for manufactured housing, other evidence of ownership of the
related Manufactured Home which is customarily relied upon in such jurisdiction
as evidence of title to a manufactured housing unit, (c) evidence of one or more
of the following types of perfection of the security interest in the related
Manufactured Home granted by such Contract, as appropriate: (i) notation of
such security interest on the title document, (ii) a financing statement meeting
the requirements of the UCC, with evidence of recording indicated thereon, or
(iii) such other evidence of perfection of a security interest in a manufactured
housing unit as is customarily relied upon in the jurisdiction in which the
related Manufactured Home is located, (d) the assignment of the Contract from
the originator (if other than Conseco Finance Corp.) to the
1-17
Originator, (e) evidence of any other Collateral Security, including with
respect to a Land-in-Lieu Contract, the mortgage or deed of trust, and (f) any
extension, modification or waiver agreement(s).
"Contract Rate" means, with respect to any particular Contract, the rate of
-------------
interest specified in that Contract and computed on a precomputed basis with an
actuarial rebate of unearned interest upon prepayment, provided that the rebate
upon prepayment of Contracts originated in California or Oklahoma may be
computed on the simple interest method if so required by applicable law or
regulations.
"Corporate Trust Office" means the office of the Trustee at which at any
----------------------
particular time its corporate trust business shall be principally administered,
which office at the date of the execution of this Agreement is located at the
address set forth in Section 12.08.
"Corresponding Certificate Class" means, with respect to each Class of
-------------------------------
Uncertificated Intermediate Interests, as follows:
Uncertificated Intermediate Interest Corresponding Certificate Class
-------------------------------------------- ---------------------------------------------
Class I-A1A Class A-1A
Class I-A1B Class A-1B
Class I-A2 Class A-2
Class I-A3 Class A-3
Class I-A4 Class A-4
Class I-A5 Class A-5
Class I-M1 Class M-1
Class I-M2 Class M-2
Class I-B1 Class B-1
Class I-B2 Class B-2
"Counsel for the Originator and Seller" means ▇▇▇▇▇▇ and ▇▇▇▇▇▇,
-------------------------------------
Professional Association, or other legal counsel for the Originator and the
Seller.
"Cumulative Realized Losses" means, as to any Remittance Date, the sum of
--------------------------
the Realized Losses for that Remittance Date and each preceding Remittance Date
since the Cut-off Date.
"Cumulative Realized Losses Test" means, to be considered "satisfied" for
-------------------------------
any Remittance Date:
(i) if such Remittance Date occurs between April 1, 2005 and March 31,
2006 (inclusive), that the Cumulative Realized Losses as of such
Remittance Date are less than or equal to 7.00% of the Cut-off Date
Pool Principal Balance;
(ii) if such Remittance Date occurs between April 1, 2006 and March 31,
2007 (inclusive), that the Cumulative Realized Losses as of such
Remittance Date are less than or equal to 8.75% of the Cut-off Date
Pool Principal Balance;
1-18
(iii) if such Remittance Date occurs between April 1, 2007 and March 31,
2008 (inclusive), that the Cumulative Realized Losses as of such
Remittance Date are less than or equal to 11.75% of the Cut-off Date
Pool Principal Balance; and
(iv) if such Remittance Date occurs on or after April 1, 2008, that the
Cumulative Realized Losses as of such Remittance Date are less than
or equal to 13.25% of the Cut-off Date Pool Principal Balance.
"Current Realized Loss Ratio" means, as to any Remittance Date, a fraction,
---------------------------
expressed as a percentage, the numerator of which is the aggregate Realized
Losses for such Remittance Date and each of the two immediately preceding
Remittance Dates, multiplied by four, and the denominator of which is the
arithmetic average of the Pool Scheduled Principal Balance as of the third
preceding Remittance Date and the Pool Scheduled Principal Balance as of such
Remittance Date.
"Custodian" means at any time the Trustee or a financial institution
---------
organized under the laws of the United States or any State, which is subject to
supervision and examination by Federal or State authorities and which is not the
Originator or an Affiliate of the Originator, that is acting at such time as
Custodian of the Land-and-Home Contract Files and Contract Files pursuant to
Section 4.01.
"Cut-off Date" means, with respect to the Initial Contracts, February 28,
------------
2001 or the date of origination if later; with respect to the Additional
Contracts, March 29, 2001; and with respect to the Subsequent Contracts, the
applicable Subsequent Cut-off Date.
"Cut-off Date Pool Principal Balance" means the aggregate of the Cut-off
-----------------------------------
Date Principal Balances of the Contracts.
"Cut-off Date Principal Balance" means, as to any Contract, the unpaid
------------------------------
principal balance thereof at the applicable Cut-off Date, after giving effect to
all installments of principal due on or prior thereto. With respect to any
Staged-Funding Contract, the Cut-off Date Principal Balance means the principal
amount stated on such Contract.
"Defaulted Contract" means a Contract with respect to which the Servicer
------------------
commenced repossession or foreclosure procedures, made a sale of such Contract
to a third party for repossession, foreclosure or other enforcement, or as to
which there was a payment delinquent 180 or more days (excluding any Contract
deemed delinquent solely because the Obligor's required monthly payment was
reduced as a result of bankruptcy or similar proceedings).
"Delinquent Contract" means a Contract that is 60 or more days delinquent
-------------------
as of the applicable Cut-off Date.
"Depository" means the initial Depository, The Depository Trust Company,
----------
the nominee of which is CEDE & CO., as the registered Holder of:
(i) one Certificate evidencing $70,000,000.00 in initial aggregate
principal balance of the Class A-1A Certificates,
1-19
(ii) one Certificate evidencing $59,000,000.00 in initial aggregate
principal balance of the Class A-1B Certificates,
(iii) one Certificate evidencing $22,300,000.00 in initial aggregate
principal balance of the Class A-2 Certificates,
(iv) one Certificate evidencing $63,400,000.00 in initial aggregate
principal balance of the Class A-3 Certificates,
(v) one Certificate evidencing $96,200,000.00 in initial aggregate
principal balance of the Class A-4 Certificates,
(vi) one Certificate evidencing $175,100,000.00 in initial aggregate
principal balance of the Class A-5 Certificates,
(vii) one Certificate evidencing $120,000,000.00 in Original Notional
Principal Amount of Class A-IO Certificates,
(viii) one Certificate evidencing $36,000,000.00 in initial aggregate
principal balance of the Class M-1 Certificates,
(ix) one Certificate evidencing $30,000,000.00 in initial aggregate
principal balance of the Class M-2 Certificates,
(x) one Certificate evidencing $30,000,000.00 in initial aggregate
principal balance of the Class B-1 Certificates, and
(xi) if and when the Class B-2 Certificates are delivered to the
Depository as provided in Section 9.01(c), one Certificate
evidencing $18,000,000.00 in initial aggregate principal balance of
the Class B-2 Certificates,
and any permitted successor depository. The Depository shall at all times be a
"clearing corporation" as defined in the Uniform Commercial Code of the State of
New York.
"Depository Participant" means a broker, dealer, bank or other financial
----------------------
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
"Determination Date" means the third Business Day preceding each Remittance
------------------
Date during the term of this Agreement.
"Disqualified Organization" has the meaning assigned in Section 9.02(b)(3).
-------------------------
"Due Date" means, as to any Contract, the date of the month on which the
--------
scheduled monthly payment for such Contract is due.
"Due Period" means with respect to any Remittance Date other than the
----------
Remittance Date in May 2001, the period from and including the 16th day of the
second month preceding such
1-20
Remittance Date, to and including the 15th day of the month immediately
preceding such Remittance Date, and with respect to the Remittance Date in May
2001, the period from and including March 1, 2001 to and including April 15,
2001.
"Electronic Ledger" means the electronic master record of installment sale
-----------------
contracts of the Originator.
"Eligible Account" means, at any time, an account which is any of the
----------------
following: (i) an account maintained with an Eligible Institution; (ii) a trust
account (which shall be a "segregated trust account") maintained with the
corporate trust department of a federal or state chartered depository
institution or trust company with trust powers and acting in its fiduciary
capacity for the benefit of the Trustee hereunder, which depository institution
or trust company shall have capital and surplus (or, if such depository
institution or trust company is a subsidiary of a bank holding company system,
the bank holding company shall have capital and surplus) of not less than
$50,000,000 and the securities of such depository institution or trust company
(or, if such depository institution or trust company is a subsidiary of a bank
holding company system and such depository institution's or trust company's
securities are not rated, the securities of the bank holding company) shall have
a credit rating from each of ▇▇▇▇▇'▇ (if rated by ▇▇▇▇▇'▇), Standard & Poor's
(if rated by Standard & Poor's) and Fitch (if rated by Fitch) in one of its
generic credit rating categories which signifies investment grade; or (iii) an
account that will not cause Standard & Poor's, ▇▇▇▇▇'▇ or Fitch to downgrade or
withdraw their then-current ratings assigned to the Certificates, as confirmed
in writing by Standard & Poor's, ▇▇▇▇▇'▇ and Fitch.
"Eligible Institution" means any depository institution (which may be the
--------------------
Trustee or an Affiliate of the Trustee) organized under the laws of the United
States or any State, the deposits of which are insured to the full extent
permitted by law by the Bank Insurance Fund (currently administered by the
Federal Deposit Insurance Corporation), which is subject to supervision and
examination by federal or state authorities and whose short-term deposits have
been rated P-1 by ▇▇▇▇▇'▇ (if rated by ▇▇▇▇▇'▇), A-1+ by Standard & Poor's (if
rated by Standard & Poor's) and F-1+ by Fitch (if rated by Fitch), or whose
unsecured long-term debt has been rated in one of the two highest rating
categories by ▇▇▇▇▇'▇, Standard & Poor's (not lower than AA) and Fitch (if rated
by Fitch) in the case of unsecured long-term debt.
"Eligible Investments" has the meaning assigned in Section 5.05(b).
--------------------
"Eligible Servicer" means the Originator or any Person qualified to act as
-----------------
Servicer of the Contracts under applicable federal and state laws and
regulations, which Person services not less than an aggregate of $100,000,000 in
outstanding principal amount of manufactured housing conditional sales contracts
and installment loan agreements and, so long as any FHA/VA Contract is
outstanding, which Person is qualified under FHA/VA Regulations to act as a
servicer of all such FHA/VA Contracts.
"Eligible Substitute Contract" means, as to any Replaced Contract for which
----------------------------
such Eligible Substitute Contract is being substituted pursuant to Section
3.06(b), a Contract that (a) as of the date of its substitution, satisfies all
of the representations and warranties (which, except when expressly stated to be
as of origination, shall be deemed to be determined as of the date of its
substitution rather than as of the Cut-off Date or the Closing Date) in Sections
3.02
1-21
and 3.03 and does not cause any of the representations and warranties in Section
3.04, after giving effect to such substitution, to be incorrect, (b) after
giving effect to the scheduled payment due in the month of such substitution,
has a Scheduled Principal Balance that is not greater than the Scheduled
Principal Balance of such Replaced Contract, (c) has a Contract Rate that is at
least equal to the Contract Rate of such Replaced Contract, (d) has a remaining
term to scheduled maturity that is not greater than the remaining term to
scheduled maturity of the Replaced Contract, and (e) is a Land-and-Home Contract
if the Replaced Contract is a Land-and-Home Contract and is otherwise secured by
a Manufactured Home that is similar in type and value to the collateral serving
the Replaced Contract. If more than one Contract is being substituted pursuant
to Section 3.06(b) for more than one Replaced Contract on a particular date,
then the conditions specified above shall be applied to the Contracts being
substituted, in the aggregate, and the Replaced Contracts, in the aggregate.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended.
"Errors and Omissions Protection Policy" means the employee errors and
--------------------------------------
omissions policy maintained by the Servicer or any similar replacement policy
covering errors and omissions by the Servicer's employees, and meeting the
requirements of Section 5.09, all as such policy relates to Contracts comprising
a portion of the corpus of the Trust.
"Event of Termination" has the meaning assigned in Section 7.01.
--------------------
"FHA/VA Contract" means a Contract that, at its origination, was insured by
---------------
the Federal Housing Administration or partially guaranteed by the Veterans
Administration.
"FHA/VA Regulations" means, as to any FHA/VA Contract, the contractual
------------------
agreements and regulations of the Federal Housing Administration or the Veterans
Administration, as the case may be, providing or governing the terms of the
insurance for such Contract by the Federal Housing Administration or the partial
guarantee for such Contract by the Veterans Administration, as the case may be.
"Fidelity Bond" means the fidelity bond maintained by the Servicer or any
-------------
similar replacement bond, meeting the requirements of Section 5.09, as such bond
relates to Contracts comprising a portion of the corpus of the Trust.
"Final Remittance Date" means the Remittance Date on which the final
---------------------
distribution in respect of the Certificates will be made pursuant to Section
12.03.
"Fitch" means Fitch, Inc., or any successor thereto; provided that if Fitch
-----
does not then have a rating outstanding on any of the Class A, Class M-1, Class
M-2 or Class B Certificates, then references herein to "Fitch" shall be deemed
to refer to the NRSRO then rating any Class of the Certificates (or, if more
than one such NRSRO is then rating any Class of the Certificates, to such NRSRO
as may be designated by the Servicer), and references herein to ratings by or
requirements of Fitch shall be deemed to have the equivalent meanings with
respect to ratings by or requirements of such NRSRO.
1-22
"Formula Principal Distribution Amount" means, as of any Remittance Date,
-------------------------------------
the sum of:
(i) all scheduled payments of principal due on each outstanding Contract
during the related Due Period as specified in the amortization
schedule at the time applicable thereto (after adjustments for
previous Partial Principal Prepayments and any adjustment to such
amortization schedule by reason of any bankruptcy of an Obligor or
similar proceeding or any moratorium or similar waiver or grace
period, or by reason of any other waiver modification or extension
granted by the Servicer in accordance with Section 5.06); plus
(ii) all Partial Principal Prepayments applied and all Principal
Prepayments in Full received during the related Due Period; plus
(iii) the aggregate Scheduled Principal Balance of all Contracts that
became Liquidated Contracts during the related Due Period plus the
amount of any reduction in principal balance of any Contract during
the related Due Period pursuant to bankruptcy proceedings involving
the related Obligor; plus
(iv) the aggregate Scheduled Principal Balance of all Contracts
repurchased during the related Due Period pursuant to Section 3.06;
plus
(v) with respect to the Remittance Date in June 2001 the Unfunded
Contract Shortfall, if any; plus
(vi) without duplication of the foregoing, all collections in respect of
principal on the Contracts received after the last day of the
related Due Period up to and including the third Business Day prior
to such Remittance Date (but in no event later than the 25th day of
the month preceding the Remittance Date); minus
(vii) with respect to all Remittance Dates other than the Remittance Date
in May 2001, the amount, if any, included in the Formula Principal
Distribution Amount for the preceding Remittance Date by virtue of
clause (vi) of the definition of Formula Principal Distribution
Amount; plus
(viii) on the Post Funding Remittance Date, the Pre-Funded Amount.
"Funding Termination Date" means the Business Day immediately preceding the
------------------------
Remittance Date occurring in the calendar month that is the third calendar month
following the calendar month of the Closing Date, or May 31, 2001.
"Hazard Insurance Policy" means, with respect to each Contract, the policy
-----------------------
of fire and extended coverage insurance (and federal flood insurance, if the
Manufactured Home is secured by an FHA/VA Contract and such Manufactured Home is
located in a federally designated special flood area) required to be maintained
for the related Manufactured Home, as provided in Section 5.09, and which, as
provided in said Section 5.09, may be a blanket mortgage impairment policy
maintained by the Servicer in accordance with the terms and conditions of said
Section 5.09.
1-23
"Independent" means, when used with respect to any specified Person, ▇▇▇▇▇▇
-----------
and ▇▇▇▇▇▇, Professional Association or any Person who (i) is in fact
independent of the Originator and the Servicer, (ii) does not have any direct
financial interest or any material indirect financial interest in the Originator
or the Servicer or in an Affiliate of either and (iii) is not connected with the
Originator or the Servicer as an officer, employee, promoter, underwriter,
trustee, partner, director or person performing similar functions. Whenever it
is provided herein that any Independent Person's opinion or certificate shall be
furnished to the Trustee, such opinion or certificate shall state that the
signatory has read this definition and is Independent within the meaning set
forth herein.
"Initial Contracts" means certain Contracts identified in the List of
-----------------
Contracts delivered pursuant to Section 2.02(a), all of which were originated on
or before March 6, 2001 and which have an aggregate Scheduled Principal Balance
as of the Cut-off Date of $537,014,241.35.
"Insurance Proceeds" means proceeds paid by any insurer pursuant to any
------------------
insurance policy or contract or any FHA/VA Contract.
"Interest Reset Period" means, with respect to any Remittance Date, the
---------------------
period from and including the prior Remittance Date (or, with respect to the
first Remittance Date, from and including the Closing Date) to but excluding
such Remittance Date.
"Intermediate Interest Principal Balance" means, with respect to each Class
---------------------------------------
of Intermediate REMIC Accretion Directed Interests, one-half the Principal
Balance of the Corresponding Certificate Class and, with respect to the Class I-
Accrual Interest, one-half the sum of the Pool Scheduled Principal Balance, the
Pre-Funded Amount and the Overcollateralization Amount.
"Intermediate Interest Shortfall" means, with respect to each Class of
-------------------------------
Uncertificated Intermediate Interests and any Remittance Date, the amount, if
any, by which the amount distributed on such Class on such Remittance Date
pursuant to Section 8.03(b)(1) is less than the amount specified in Section
8.03(b)(1).
"Intermediate REMIC" means the segregated pool of assets consisting of the
------------------
Uncertificated Subsidiary Interests, as to which assets a separate REMIC
election is to be made.
"Intermediate REMIC Accretion Directed Interests" means the Uncertificated
-----------------------------------------------
Intermediate Interests other than the Class I-Accrual Interest and the Class I-
AIO Interest.
"Land-and-Home Contract" means a Contract that is secured by a Mortgage on
----------------------
real estate on which the related Manufactured Home is situated, and which
Manufactured Home is considered or classified as part of the real estate under
the laws of the jurisdiction in which it is located.
"Land-and-Home Contract File" means, as to each Land-and-Home Contract, (a)
---------------------------
the original executed copy of the Land-and-Home Contract; (b) the original
related Mortgage with evidence of recording thereon (or, if the original
Mortgage has not yet been returned by the applicable recording office, a copy
thereof, certified by such recording office, which will be replaced by the
original Mortgage when it is so returned) and any title document for the related
1-24
Manufactured Home; (c) the assignment of the Land-and-Home Contract and the
related Mortgage from the originator (if other than Conseco Finance Corp.) to
the Originator; (d) an endorsement of such Land-and-Home Contract by the Seller
to the Trustee or in blank; (e) an assignment of the related Mortgage to the
Trustee or in blank; and (f) any extension, modification or waiver agreement(s).
"Land-in-Lieu Contract" means a Contract that is secured by (i) a security
---------------------
interest in a Manufactured Home and (ii) a mortgage or deed of trust on real
estate on which such Manufactured Home is situated, but such Manufactured Home
is not considered or classified as part of the real estate under the laws of the
jurisdiction in which it is located.
"LIBOR" means, with respect to any Interest Reset Period, the offered rate,
-----
as established by the Calculation Agent, for United States dollar deposits for
one month that appears on Telerate Page 3750 as of 11:00 A.M., London time, on
the LIBOR Determination Date for such Interest Reset Period. If on any LIBOR
Determination Date the offered rate does not appear on Telerate Page 3750, the
Calculation Agent will request each of the reference banks (which shall be major
banks that are engaged in transactions in the London interbank market selected
by the Calculation Agent) to provide the Calculation Agent with its offered
quotation for United States dollar deposits for one month to prime banks in the
London interbank market as of 11:00 A.M., London time, on such date. If at least
two reference banks provide the Calculation Agent with such offered quotations,
LIBOR on such date will be the arithmetic mean, rounded upwards, if necessary,
to the nearest 1/100,000 of 1% (.0000001), with five one-millionths of a
percentage point rounded upward, of all such quotations. If on such date fewer
than two of the reference banks provide the Calculation Agent with such offered
quotations, LIBOR on such date will be the arithmetic mean, rounded upwards, if
necessary, to the nearest 1/100,000 of 1% (.0000001), with five one-millionths
of a percentage point rounded upward, of the offered per annum rates that one or
more leading banks in the City of New York selected by the Calculation Agent are
quoting as of 11:00 A.M., New York City time, on such date to leading European
banks for United States dollar deposits for one month; provided, however, that
-------- -------
if such banks are not quoting as described above, LIBOR for such date will be
LIBOR applicable to the Interest Reset Period immediately preceding such
Interest Reset Period; and provided, further, that if the result of the
-------- --------
foregoing would be for three consecutive Remittance Dates to base LIBOR on the
rate applicable in the immediately preceding Interest Reset Period, for such
third consecutive Remittance Date the Calculation Agent shall instead select an
alternative comparable index (over which the Calculation Agent has no control)
used for determining one-month Eurodollar lending rates that is calculated and
published (or otherwise made available) by an independent third party.
"LIBOR Business Day" as used herein means a day that is both a Business Day
------------------
and a day on which banking institutions in the City of London, England are not
required or authorized by law to be closed.
"LIBOR Determination Date" means the second LIBOR Business Day prior to the
------------------------
first day of the related Interest Reset Period.
"Liquidated Contract" means any defaulted Contract as to which the Servicer
-------------------
has determined that all amounts which it expects to recover from or on account
of such Contract
1-25
have been recovered; provided that any defaulted Contract in respect of which
the related Manufactured Home and, in the case of Land-and-Home Contracts,
Mortgaged Property, have been realized upon and disposed of and the proceeds of
such disposition have been received shall be deemed to be a Liquidated Contract.
"Liquidation Expenses" means out-of-pocket expenses (exclusive of any
--------------------
overhead expenses) which are incurred by the Servicer in connection with the
liquidation of any defaulted Contract, on or prior to the date on which the
related Manufactured Home and, in the case of Land-and-Home Contracts, Mortgaged
Property, are disposed of, including, without limitation, legal fees and
expenses, and any related and unreimbursed expenditures for property taxes,
property preservation or restoration of the property to marketable condition.
"Liquidation Proceeds" means cash (including Insurance Proceeds) received
--------------------
in connection with the liquidation of defaulted Contracts, whether through
repossession, foreclosure sale or otherwise, including any rental income
realized from the repossessed Manufactured Home.
"List of Contracts" means the lists identifying each Contract constituting
-----------------
part of the corpus of the Trust, and which lists are either delivered pursuant
to Section 2.02(a) of this Agreement or attached to a Subsequent Transfer
Instrument as Exhibit A-1, as such lists may be amended from time to time
pursuant to Section 3.06(b) to add Eligible Substitute Contracts and delete
Replaced Contracts. Each List of Contracts shall set forth as to each Contract
identified on it (i) the Cut-off Date Principal Balance, (ii) the amount of
monthly payments due from the Obligor, (iii) the Contract Rate and (iv) the
maturity date.
"Loan-to-Value Ratio" means, (a) with respect to any Contract other than a
-------------------
Land-in-Lieu Contract, one minus a fraction, the numerator of which is the total
amount down (which may include both cash (plus, in certain cases, fees and
insurance premiums financed, but not buydown points) and, for certain Contracts,
the amount of any equity in land on which a lien has been granted) and the
denominator of which is the sum of the original principal amount and such amount
down, and (b) with respect to Land-in-Lieu Contracts, one minus a fraction, the
numerator of which is the appraised value of land and the denominator of which
is the original principal amount.
"Manufactured Home" means a unit of manufactured housing, including all
-----------------
accessions thereto, securing the indebtedness of the Obligor under the related
Contract.
"Master Certificates" means all of the Certificates other than the Class C
-------------------
Subsidiary Certificate.
"Master REMIC" means the segregated pool of assets consisting of the
------------
Uncertificated Intermediate Interests, as to which a separate REMIC election is
to be made.
"Maturity Date" means, as to any Certificate other than a Class C
-------------
Certificate, and as to any Uncertificated Subsidiary Interest and Uncertificated
Intermediate Interest, the latest possible maturity date for purposes of
complying with the REMIC Provisions governing "regular interests." The Maturity
Dates for such Certificates, Uncertificated Intermediate Interests and
Uncertificated Subsidiary Interests are set forth in Sections 2.05 (b), (c) and
(d).
1-26
"Monthly Report" has the meaning assigned in Section 6.01.
--------------
"Monthly Servicing Fee" means, as of any Remittance Date, one-twelfth of
---------------------
the product of 0.50% and the Pool Scheduled Principal Balance for the
immediately preceding Remittance Date (or, with respect to the first Remittance
Date, the Cut-off Date Pool Principal Balance as of the Closing Date).
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., or any successor thereto;
-------
provided that, if Moody's provided a rating on any of the Certificates, as
required by Section 2.02, and does not as of any subsequent date have a rating
outstanding on any of the Class A, Class M-1, Class M-2 or Class B Certificates,
then references herein to "▇▇▇▇▇'▇" shall be deemed to refer to the NRSRO then
rating any Class of the Certificates (or, if more than one such NRSRO is then
rating any Class of the Certificates, to such NRSRO as may be designated by the
Servicer), and references herein to ratings by or requirements of ▇▇▇▇▇'▇ shall
be deemed to have the equivalent meanings with respect to ratings by or
requirements of such NRSRO.
"Mortgage" means the mortgage, deed of trust, security deed or similar
--------
evidence of lien, creating a first lien on an estate in fee simple in the real
property securing a Land-and-Home Contract.
"Mortgaged Property" means the property subject to the lien of a Mortgage.
------------------
"Net Liquidation Loss" means, as to a Liquidated Contract, the amount, if
--------------------
any, by which (a) the outstanding principal balance of such Liquidated Contract
plus accrued and unpaid interest thereon to the date on which such Liquidated
Contract became a Liquidated Contract exceeds (b) the Net Liquidation Proceeds
for such Liquidated Contract.
"Net Liquidation Proceeds" means, as to a Liquidated Contract, all
------------------------
Liquidation Proceeds received on or prior to the last day of the month in which
such Contract became a Liquidated Contract, net of Liquidation Expenses.
"Notional Principal Amount" means, as to each Remittance Date identified
-------------------------
below, the related amount set forth below:
Remittance Date Notional Principal Amount
--------------- -------------------------
May, June, July 2001 $120,000,000
August, September, October 2001 117,400,000
November, December 2001
January 2002 114,800,000
February, March, April 2002 112,000,000
May, June, July, 2002 109,200,000
August, September, October 2002 106,200,000
1-27
Remittance Date Notional Principal Amount
--------------- -------------------------
November, December 2002
January 2003 103,200,000
February, March, April 2003 100,200,000
May, June, July 2003 97,200,000
August, September, October 2003 94,000,000
November, December 2003
January 2004 91,200,000
February, March, April 2004 88,200,000
May, June, July 2004 85,400,000
August, September, October 2004 82,800,000
November, December 2004
January 2005 80,000,000
February, March, April 2005 77,400,000
May, June, July 2005 75,000,000
August, September, October 2005 72,800,000
November, December 2005
January 2006 70,600,000
February, March, April 2006 68,400,000
May, June, July 2006 66,200,000
August, September, October 2006 64,200,000
November, December 2006
January 2007 62,200,000
"NRSRO" means any nationally recognized statistical rating organization.
-----
"Obligor" means each Person who is indebted under a Contract.
-------
1-28
"Officer's Certificate" means a certificate signed by the Chairman of the
---------------------
Board, President or any Vice President of the Originator or the Seller and
delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may, except as
------------------
expressly provided herein, be salaried counsel for the Originator or the Seller,
acceptable to the Trustee and the Originator or the Seller, provided that any
opinion of counsel relating to the qualification of the Subsidiary REMIC or the
Master REMIC as a REMIC or compliance with the REMIC Provisions must be an
opinion of Independent counsel.
"Original Class A Principal Balance" means the Original Principal Balance
----------------------------------
of the Class A Certificates.
"Original Notional Principal Amount" means $120,000.000.
"Original Principal Balance" means, as to each Class of Master
--------------------------
Certificates, Uncertificated Intermediate Interests and Uncertificated
Subsidiary Interests, the respective amounts set forth with respect to such
Class in Sections 2.05(b), 2.05(c) and 2.05(d).
"Overcollateralization Amount" means, as of any Remittance Date, the amount
----------------------------
by which the aggregate Class Principal Balance of the Certificates as of such
Remittance Date is less than the sum of the Pool Scheduled Principal Balance and
the Pre-Funded Amount as of the immediately preceding Remittance Date.
"Overcollateralization Amount Increase" means, as of any Remittance Date,
-------------------------------------
the amount by which the Overcollateralization Amount on that Remittance Date
exceeds the Overcollateralization Amount as of the immediately preceding
Remittance Date.
"Partial Principal Prepayment" means (a) any Principal Prepayment other
----------------------------
than a Principal Prepayment in Full and (b) any cash amount deposited in the
Certificate Account pursuant to the provision in Section 3.06(a) or pursuant to
Section 3.06(b).
"Paying Agent" has the meaning assigned in Section 8.01(c).
------------
"Percentage Interest" means, as to any Certificate, the percentage interest
-------------------
evidenced thereby in distributions made on the related Class, such percentage
interest being equal to, in the case of the Class A, Class M and Class B
Certificates, the percentage (carried to eight places) obtained from dividing
the denomination of such Certificate by the Original Principal Balance of the
related Class or, in the case of a Class A-IO Certificate, by the Original
Notional Principal Amount; and in the case of the Class B-3I and Class C
Certificates, the percentage specified on the face of such Certificate. The
aggregate Percentage Interests for each Class of Certificates shall equal 100%,
respectively.
"Person" means any individual, corporation, partnership, joint venture,
------
association, joint stock company, trust (including any beneficiary thereof),
unincorporated organization or government or any agency or political subdivision
thereof.
"Plan" has the meaning assigned in Section 9.02(b)(2).
----
1-29
"Pool Factor" means, at any time, the percentage derived from a fraction,
-----------
the numerator of which is the aggregate Principal Balance of each Class of
Certificates at such time and the denominator of which is the Cut-off Date Pool
Principal Balance.
"Pool Scheduled Principal Balance" means, as of any Remittance Date, the
--------------------------------
aggregate Scheduled Principal Balance of all Contracts that were outstanding
during the related Due Period.
"Post-Funding Remittance Date" means the first Remittance Date after the
----------------------------
last day of the Pre-Funding Period.
"Pre-Funded Amount" means with respect to any date of determination, the
-----------------
amount then on deposit in the Pre-Funding Account, after giving effect to any
sale of Subsequent Contracts to the Trust on such date, excluding any investment
earnings.
"Pre-Funding Account" means the account so designated, established and
-------------------
maintained pursuant to Section 8.07.
"Pre-Funding Period" means the period beginning on the Closing Date and
------------------
ending on the earliest of (a) the date on which the amount on deposit in the
Pre-Funding Account is less than $10,000, (b) the Funding Termination Date or
(c) the date on which an Event of Termination occurs.
"Pre-Funding Subaccount" means the subaccount, if any, so designated,
----------------------
established and maintained pursuant to Section 8.07.
"Principal Prepayment" means a payment or other recovery of principal on a
--------------------
Contract (exclusive of Liquidation Proceeds) which is received in advance of its
scheduled due date and applied upon receipt (or, in the case of a Partial
Principal Prepayment, upon the next scheduled payment date on such Contract) to
reduce the outstanding principal amount due on such Contract prior to the date
or dates on which such principal amount is due.
"Principal Prepayment in Full" means any Principal Prepayment of the entire
----------------------------
principal balance of a Contract.
"Rating Agencies" means Standard & Poor's, ▇▇▇▇▇'▇ and Fitch.
---------------
"Realized Losses" means, as to any Remittance Date, the aggregate Net
---------------
Liquidation Losses of all Contracts that became Liquidated Contracts during the
immediately preceding month.
"Record Date" means the Business Day immediately preceding the related
-----------
Remittance Date.
"Regular Certificate" means a Class A, Class M, Class B or Class B-3I
-------------------
Certificate.
"REMIC" means a "real estate mortgage investment conduit" as defined in
-----
Section 860D of the Code.
1-30
"REMIC Provisions" means the provisions of the federal income tax law
----------------
relating to REMICs, which appear at Sections 860A through 860G of the Code, and
related provisions and any temporary, proposed or final regulations promulgated
thereunder, as the foregoing may be in effect from time to time.
"Remittance Date" means the first day of each month during the term of this
---------------
Agreement, or if such day is not a Business Day, the next succeeding Business
Day, commencing in May 2001.
"Remittance Rate" means, with respect to each Class of Certificates, the
---------------
rate set forth in Section 2.05(b), and, with respect to each Class of
Uncertificated Intermediate Interests, the rate set forth in Section 2.05(c).
"Replaced Contract" has the meaning assigned in Section 3.06(b).
-----------------
"Repurchase Price" means, with respect to a Contract to be repurchased
----------------
pursuant to Section 3.06, an amount equal to (a) the remaining principal amount
outstanding on such Contract (or, with respect to an Unfunded Contract being
repurchased pursuant to Section 3.06(c), the Cut-off Date Principal Balance of
such Unfunded Contract), plus (b) interest at the Contract Rate on such Contract
from the end of the Due Period with respect to which the Obligor last made a
payment through the end of the immediately preceding Due Period.
"Responsible Officer" means, with respect to the Trustee, the chairman and
-------------------
any vice chairman of the board of directors, the president, the chairman and
vice chairman of any executive committee of the board of directors, every vice
president, assistant vice president, the secretary, every assistant secretary,
cashier or any assistant cashier, controller or assistant controller, the
treasurer, every assistant treasurer, every trust officer, assistant trust
officer and every other officer or assistant officer of the Trustee customarily
performing functions similar to those performed by persons who at the time shall
be such officers, respectively, or to whom a corporate trust matter is referred
because of knowledge of, familiarity with, and authority to act with respect to
a particular matter.
"Scheduled Principal Balance" means, as to any Contract and any Remittance
---------------------------
Date or the applicable Cut-off Date, the principal balance of such Contract as
of the Due Date in the related Due Period or as of the Due Date immediately
preceding the Cut-off Date, as applicable, as the case may be, as specified in
the amortization schedule at the time relating thereto (after any adjustment to
such amortization schedule by reason of any bankruptcy of an Obligor or similar
proceeding or any moratorium or similar waiver or grace period) after giving
effect to any previous Partial Principal Prepayments and to the payment of
principal due on such Due Date and irrespective of any delinquency in payment
by, or extension granted to, the related Obligor.
"Servicer" means the Originator until any Service Transfer hereunder and
--------
thereafter means the new servicer appointed pursuant to Article VII.
"Service Transfer" has the meaning assigned in Section 7.02.
----------------
"Servicing Officer" means any officer of the Servicer involved in, or
-----------------
responsible for, the administration and servicing of Contracts whose name
appears on a list of servicing officers
1-31
appearing in an Officer's Certificate furnished to the Trustee by the
Originator, as the same may be amended from time to time.
"Sixty-Day Delinquency Ratio" means, as to any Remittance Date, a fraction,
---------------------------
expressed as a percentage, the numerator of which is the aggregate of the
outstanding balances of all Contracts that were delinquent 60 days or more as of
the end of the related Due Period (including Contracts in respect of which the
related Manufactured Homes have been repossessed but are still in inventory),
and the denominator of which is the Pool Scheduled Principal Balance as of such
Remittance Date.
"Staged-Funding Contract" means an Initial or Additional Contract with
-----------------------
respect to which the Originator has agreed to make multiple disbursements (up to
the related Cut-off Date Principal Balance) with respect to the purchase of the
related Manufactured Home and improvement of the related real estate, but not
all such disbursements have been made as of the Closing Date.
"Staged-Funding Contract Reserve Account" means the account established and
---------------------------------------
maintained pursuant to Section 3.08.
"Standard & Poor's" means Standard & Poor's Rating Services, a division of
-----------------
The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or any successor thereto; provided that if
Standard & Poor's does not then have a rating outstanding on any of the Class A,
Class M, or Class B Certificates, then references herein to "Standard & Poor's"
shall be deemed to refer to the NRSRO then rating any Class of the Certificates
(or, if more than one NRSRO is then rating any Class of the Certificates, to
such NRSRO as may be designated by the Servicer), and references herein to
ratings by or requirements of Standard & Poor's shall be deemed to have the
equivalent meanings with respect to ratings by or requirements of such NRSRO.
"Step-up Rate Contract" means any Contract bearing interest during an
---------------------
initial period or periods at a fixed rate or fixed rates that are lower than the
fixed rate borne thereafter.
"Subsequent Contract" means a Contract sold by the Seller to the Trust
-------------------
pursuant to Section 2.03, such Contract being identified on Exhibit A attached
to a Subsequent Transfer Instrument.
"Subsequent Cut-off Date" means, with respect to a Subsequent Contract,
-----------------------
either the last day of the calendar month in which the related Subsequent
Transfer Date occurs or the last day of the preceding calendar month, as
specified by the Seller in the related Addition Notice.
"Subsequent Transfer Date" means, with respect to each Subsequent Transfer
------------------------
Instrument, the date on which the related Subsequent Contracts are sold to the
Trust.
"Subsequent Transfer Instrument" means each Subsequent Transfer Instrument
------------------------------
dated as of a Subsequent Transfer Date executed by the Seller substantially in
the form of Exhibit P, by which the Seller sells Subsequent Contracts to the
Trust.
"Subsidiary Interest Adjusted Principal Balance" means, as to any
----------------------------------------------
Remittance Date and each Class of Uncertificated Subsidiary Interests, the
Subsidiary Interest Principal Balance of
1-32
such Class less its allocable share of the amount, if any, by which the
aggregate Subsidiary Interest Principal Balance of the Class S-1 and Class S-2
Interests exceeds the Pool Scheduled Principal Balance, such excess to be
allocated sequentially; i.e., first to the Class S-1 Interest up to its
Subsidiary Interest Principal Balance, then to the Class S-2(1) Interest any
remaining excess, up to its Subsidiary Interest Principal Balance, and last to
the S-2(23) Interest.
"Subsidiary Interest Principal Balance" means, as to any Remittance Date
-------------------------------------
and each Class of Uncertificated Subsidiary Interests, the Original Principal
Balance of such Class less all amounts previously distributed under Section
8.03(c) in respect of such Class on account of principal.
"Subsidiary Interest Shortfall" means, with respect to each Class of
-----------------------------
Uncertificated Subsidiary Interests and any Remittance Date, the amount, if any,
by which the amount distributed on such Class on such Remittance Date pursuant
to Section 8.03(c)(1) is less than the amount specified in Section 8.03(c)(1).
"Subsidiary REMIC" means the segregated pool of assets described as
----------------
follows, as to which a separate REMIC election is to be made: (a) all the
rights, benefits, and obligations arising from and in connection with each
Contract and any related Mortgage, (b) all rights under any Hazard Insurance
Policy relating to a Manufactured Home securing a Contract for the benefit of
the owner of such Contract and proceeds from the Errors and Omissions Protection
Policy and any blanket hazard policy to the extent such proceeds relate to any
Manufactured Home, (c) all rights under any FHA/VA Regulation pertaining to any
FHA/VA Contract, (d) all remittances, deposits and payments made into the
Certificate Account and amounts in the Certificate Account (other than payments
on the Uncertificated Subsidiary Interests), (e) all proceeds in any way derived
from any of the foregoing items, and (f) all documents contained in the Contract
Files or the Land-and-Home Contract Files.
"Telerate Page 3750" means the display page so designated on the Dow ▇▇▇▇▇
------------------
Telerate Service (or such other page as may replace that page on that service,
or such other service as may be nominated as the information vendor by the
Calculation Agent, for the purpose of displaying London interbank offered rates
of major banks).
"Transfer Agreement" means that certain Transfer Agreement between Conseco
------------------
Finance Securitizations Corp., as Purchaser, and Conseco Finance Corp., as
Seller, dated as of even date herewith.
"Trust" means the trust created by this Agreement, known as Manufactured
-----
Housing Contract Senior/Subordinate Pass-Through Certificate Trust 2001-1, the
corpus of which consists of (a) all the rights, benefits, and obligations
arising from and in connection with each Contract and any related Mortgage, (b)
all rights under any Hazard Insurance Policy relating to a Manufactured Home
securing a Contract for the benefit of the owner of such Contract and proceeds
from the Errors and Omissions Protection Policy and any blanket hazard policy to
the extent such proceeds relate to any Manufactured Home, (c) all rights under
any FHA/VA Regulation pertaining to any FHA/VA Contract, (d) all rights of the
Seller under the Transfer Agreement, (e) all remittances, deposits and payments
made into the Certificate Account and amounts in the Certificate Account, (f)
all proceeds in any way derived from any of the
1-33
foregoing items, (g) all documents contained in the Contract Files or the Land-
and-Home Contract Files, (h) the obligations and related demand note of the
Company delivered pursuant to Section 3.06(c) and the related Staged-Funding
Contract Reserve Account, if any, (i) the Capitalized Interest Account and (j)
the Pre-Funding Account.
"Uncertificated Intermediate Interests" means the Class I-A1A, Class I-A1B,
-------------------------------------
Class I-A2, Class I-A3, Class I-A4, Class I-A5, Class I-AIO, Class I-M1, Class
I-M2, Class I-B1 and Class I-B2 and Class I-Accrual Interests, collectively.
"Uncertificated Subsidiary Interests" means the Class S-1 and Class S-2
-----------------------------------
Interests, collectively.
"Undelivered Contract" means as of any date of determination an Initial or
--------------------
Additional Contract identified, on the exception report attached to the
Acknowledgement delivered by the Trustee under Section 2.04, as a Land-and-Home
Contract as to which the Trustee did not receive the related Land-and-Home
Contract File as of the Closing Date and has not received the related Land-and-
Home Contract File and remitted payment to the Seller pursuant to Section
8.07(c).
"Undelivered Contract Subaccount" means the subaccount so designated and
-------------------------------
established and maintained pursuant to Section 8.07.
"Underwriters" means Credit Suisse First Boston Corporation, ▇▇▇▇▇▇
------------
Brothers Inc. and ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated.
"Underwriting Agreement" means the Underwriting Agreement and related Terms
----------------------
Agreement, each dated as of March 16, 2001, among the Originator, the Seller and
the Underwriters.
"Unfunded Contract" has the meaning specified in Section 3.06(c).
-----------------
"Unfunded Contract Shortfall" has the meaning specified in Section 3.06(c).
---------------------------
"Unpaid Class A Interest Shortfall" means, as to each Class of Class A
---------------------------------
Certificates and any Remittance Date, the amount, if any, of the Class A
Interest Shortfall applicable to such Class for the prior Remittance Date, plus
accrued interest (to the extent payment thereof is legally permissible) at the
related Remittance Rate on the amount thereof from such prior Remittance Date to
such current Remittance Date (calculated in the manner specified in Section
1.03).
"Unpaid Class A Principal Shortfall" means, as to each Class of Class A
----------------------------------
Certificates and any Remittance Date, the amount, if any, by which the aggregate
of the Class A Principal Shortfalls for prior Remittance Dates is in excess of
the amounts distributed on prior Remittance Dates to Holders of Class A
Certificates pursuant to Section 8.03(a)(6)(ii).
"Unpaid Class B-1 Interest Shortfall" means, as to any Remittance Date, the
-----------------------------------
amount, if any, of the Class B-1 Interest Shortfall for the prior Remittance
Date, plus accrued interest (to the extent payment thereof is legally
permissible) at the Class B-1 Remittance Rate on the amount
1-34
thereof from such prior Remittance Date to such current Remittance Date
(calculated in the manner specified in Section 1.03).
"Unpaid Class B-2 Interest Shortfall" means, as to any Remittance Date, the
-----------------------------------
amount, if any, of the Class B-2 Interest Shortfall for the prior Remittance
Date, plus accrued interest (to the extent payment thereof is legally
permissible) at the Class B-2 Remittance Rate on the amount thereof from such
prior Remittance Date to such current Remittance Date (calculated in the manner
specified in Section 1.03).
"Unpaid Class B-1 Liquidation Loss Interest Shortfall" means, as to any
----------------------------------------------------
Remittance Date, the sum of (i) the amount, if any, of the remainder of (x) the
Class B-1 Liquidation Loss Interest Amount, if any, for the immediately prior
Remittance Date, plus (y) the Unpaid Class B-1 Liquidation Loss Interest
Shortfall determined as of such immediately prior Remittance Date, minus (z) all
amounts distributed to the Holders of the Class B-1 Certificates on account of
any Unpaid Class B-1 Liquidation Loss Interest Shortfall pursuant to Section
8.03(a)(9)(iv) on such immediately prior Remittance Date, plus (ii) accrued
interest (to the extent payment thereof is legally permissible) at the Class B-1
Remittance Rate on the amount specified in clause (i) from such prior Remittance
Date to such current Remittance Date (calculated in the manner specified in
Section 1.03).
"Unpaid Class B-1 Principal Shortfall" means, as to any Remittance Date,
------------------------------------
the amount, if any, by which the aggregate of the Class B-1 Principal Shortfalls
for prior Remittance Dates is in excess of the amounts distributed on prior
Remittance Dates to Holders of Class B-1 Certificates pursuant to Section
8.03(a)(9)(i).
"Unpaid Class B-2 Principal Shortfall" means, as to any Remittance Date,
------------------------------------
the amount, if any, by which the aggregate of the Class B-2 Principal Shortfalls
for prior Remittance Dates is in excess of the amounts distributed on prior
Remittance Dates to Holders of Class B-2 Certificates pursuant to Section
8.03(a)(10)(iii).
"Unpaid Class B-3I Shortfall" means, as to any Remittance Date, the amount,
---------------------------
if any, by which the aggregate of the Class B-3I Shortfalls for prior Remittance
Dates is in excess of the amounts distributed on prior Remittance Dates to
Holders of Class B-3I Certificates pursuant to Section 8.03(a)(14) in respect of
any Unpaid Class B-3I Shortfall.
"Unpaid Class M-1 Interest Shortfall" means, as to any Remittance Date, the
-----------------------------------
amount, if any, of the Class M-1 Interest Shortfall for the prior Remittance
Date, plus accrued interest (to the extent payment thereof is legally
permissible) at the Class M-1 Remittance Rate on the amount thereof from such
prior Remittance Date to such current Remittance Date (calculated in the manner
specified in Section 1.03).
"Unpaid Class M-2 Interest Shortfall" means, as to any Remittance Date, the
-----------------------------------
amount, if any, of the Class M-2 Interest Shortfall for the prior Remittance
Date, plus accrued interest (to the extent payment thereof is legally
permissible) at the Class M-2 Remittance Rate on the amount thereof from such
prior Remittance Date to such current Remittance Date (calculated in the manner
specified in Section 1.03).
1-35
"Unpaid Class M-1 Liquidation Loss Interest Shortfall" means, as to any
----------------------------------------------------
Remittance Date, the sum of (i) the amount, if any, of the remainder of (x) the
Class M-1 Liquidation Loss Interest Amount, if any, for the immediately prior
Remittance Date, plus (y) the Unpaid Class M-1 Liquidation Loss Interest
Shortfall determined as of such immediately prior Remittance Date, minus (z) all
amounts distributed to the Holders of the Class M-1 Certificates on account of
any Unpaid Class M-1 Liquidation Loss Interest Shortfall pursuant to Section
8.03(a)(7)(iv) on such immediately prior Remittance Date, plus (ii) accrued
interest (to the extent payment thereof is legally permissible) at the Class M-1
Remittance Rate on the amount specified in clause (i) from such prior Remittance
Date to such current Remittance Date (calculated in the manner specified in
Section 1.03).
"Unpaid Class M-2 Liquidation Loss Interest Shortfall" means, as to any
----------------------------------------------------
Remittance Date, the sum of (i) the amount, if any, of the remainder of (x) the
Class M-2 Liquidation Loss Interest Amount, if any, for the immediately prior
Remittance Date, plus (y) the Unpaid Class M-2 Liquidation Loss Interest
Shortfall determined as of such immediately prior Remittance Date, minus (z) all
amounts distributed to the Holders of the Class M-2 Certificates on account of
any Unpaid Class M-2 Liquidation Loss Interest Shortfall pursuant to Section
8.03(a)(8)(iv) on such immediately prior Remittance Date, plus (ii) accrued
interest (to the extent payment thereof is legally permissible) at the Class M-2
Remittance Rate on the amount specified in clause (i) from such prior Remittance
Date to such current Remittance Date (calculated in the manner specified in
Section 1.03).
"Unpaid Class M-1 Principal Shortfall" means, as to any Remittance Date,
------------------------------------
the amount, if any, by which the aggregate of the Class M-1 Principal Shortfalls
for prior Remittance Dates is in excess of the amounts distributed on prior
Remittance Dates to Holders of Class M-1 Certificates pursuant to Section
8.03(a)(7)(i).
"Unpaid Class M-2 Principal Shortfall" means, as to any Remittance Date,
------------------------------------
the amount, if any, by which the aggregate of the Class M-2 Principal Shortfalls
for prior Remittance Dates is in excess of the amounts distributed on prior
Remittance Dates to Holders of Class M-2 Certificates pursuant to Section
8.03(a)(8)(i).
"Unpaid Intermediate Interest Shortfall" means, as to any Remittance Date
--------------------------------------
and any Class of Uncertificated Intermediate Interests, the amount, if any, of
the Intermediate Interest Shortfall for the prior Remittance Date with respect
to such Class, plus accrued interest (to the extent payment thereof is legally
permissible) at 1/12th of the Adjusted Weighted Average Contract Rate on the
amount thereof from such prior Remittance Date to such current Remittance Date.
"Unpaid Subsidiary Interest Shortfall" means, as to any Remittance Date and
------------------------------------
any Class of Uncertificated Subsidiary Interests, the amount, if any, of the
Subsidiary Interest Shortfall for the prior Remittance Date with respect to such
Class, plus accrued interest (to the extent payment thereof is legally
permissible) at 1/12th of the Weighted Average Contract Rate on the amount
thereof from such prior Remittance Date to such current Remittance Date.
"Weighted Average Contract Rate" means, as to any Remittance Date, the
------------------------------
weighted average (determined by Scheduled Principal Balance) of the Contract
Rates of all Contracts that were outstanding during the prior related Due
Period.
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SECTION 1.03 Calculations.
------------
Interest on the Class A-1A Certificates shall be computed on the basis of
actual days elapsed in a year of 360 days. All calculations of the amount of
interest accrued on each other Class of Certificates with respect to any
Remittance Date shall be calculated on the basis of a 360-day year of twelve 30-
day months.
1-37
ARTICLE II
----------
ESTABLISHMENT OF TRUST; TRANSFER OF CONTRACTS
---------------------------------------------
SECTION 2.01 Closing.
-------
a. There is hereby created, by the Seller as settlor, a separate trust
which shall be known as Manufactured Housing Contract Senior/Subordinate Pass-
Through Certificate Trust 2001-1. The Trust shall be administered pursuant to
the provisions of this Agreement for the benefit of the Certificateholders. By
the execution and delivery of this Agreement, the Seller has agreed that it will
elect or will cause an election to be made to treat the pool of assets
comprising each of the Subsidiary REMIC, Intermediate REMIC and Master REMIC as
a REMIC.
b. The Seller hereby transfers, assigns, delivers, sells, sets over and
otherwise conveys to the Trustee on behalf of the Trust, by execution of an
assignment substantially in the form of Exhibit D hereto, (1) all the right,
title and interest of the Seller in and to the Contracts, including, without
limitation, all right, title and interest in and to the Collateral Security, all
rights to receive payments on or with respect to the Contracts (other than the
principal and interest due on the Contracts on or before the applicable Cut-off
Date) and all rights of the Seller under the Transfer Agreement, (2) all rights
under every Hazard Insurance Policy relating to a Manufactured Home securing a
Contract for the benefit of the owner of such Contract, (3) all rights under all
FHA/VA Regulations pertaining to any Contract that is an FHA/VA Contract, (4)
the proceeds from the Errors and Omissions Protection Policy and all rights
under any blanket hazard insurance policy to the extent they relate to the
Manufactured Homes, (5) all documents contained in the Contract Files and the
Land-and-Home Contract Files, (6) $0 paid out of the proceeds of the sale of the
Certificates and deposited in the Staged-Funding Contract Reserve Account, (7)
amounts on deposit in the Capitalized Interest Account, Pre-Funding Account and
Staged-Funding Contract Reserve Account and (8) all proceeds and products in any
way derived from any of the foregoing.
c. The Seller agrees that it will use its best efforts (consistent with
prudent lending practices) to cause each Staged-Funding Contract to be fully
disbursed on or before the Funding Termination Date. The additional payment
obligations of any Obligor attributable to any further disbursements on any
Staged-Funding Contract made on or before the Funding Termination Date shall
automatically become the property of the Trust, without further action by the
Seller or the Trust. The payment to the Seller by the Trust and the transfer of
additional obligations to the Trust pursuant to this Section 2.01(c) and Section
3.06(c)(ii) shall be a purchase by the Trust of qualified mortgages pursuant to
a fixed price contract within the meaning of Section 860G(a)(3) of the Code.
d. Although the parties intend that the conveyance of the Seller's right,
title and interest in and to the Contracts and the Collateral Security pursuant
to this Agreement and each Subsequent Transfer Instrument shall constitute a
purchase and sale and not a pledge of security for loans from the
Certificateholders, it is the intent of this Agreement that if such conveyances
are deemed to be a pledge of security for loans from the Certificateholders or
any other Persons (the "Secured Obligations"), the parties intend that the
rights and obligations of the parties to the Secured Obligations shall be
established pursuant to the terms of this Agreement. The parties
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also intend and agree that the Seller shall be deemed to have granted to the
Trustee, and the Seller does hereby grant to the Trustee, a perfected first-
priority security interest in the items designated in Section 2.01(b)(1) through
2.01(b)(8) above and in each Subsequent Transfer Instrument, and all proceeds
thereof, to secure the Secured Obligations, and that this Agreement shall
constitute a security agreement under applicable law. If the trust created by
this Agreement terminates prior to the satisfaction of the claims of any Person
under any Certificates or the Secured Obligations, the security interest created
hereby shall continue in full force and effect and the Trustee shall be deemed
to be the collateral agent for the benefit of such Person.
SECTION 2.02 Conditions to the Closing.
-------------------------
On or before the Closing Date, the Seller shall deliver or cause to be
delivered the following documents to the Trustee:
a. The List of Contracts identifying all Initial and Additional
Contracts, certified by the Chairman of the Board, President or any Vice
President of the Seller.
b. A certificate of an officer of each of the Originator and Seller
substantially in the form of Exhibit E hereto.
c. An Opinion of Counsel for each of the Originator and Seller
substantially in the form of Exhibit F hereto.
d. The Trustee's acknowledgment in the form of Exhibit G hereto.
e. A letter acceptable to the Underwriters from PricewaterhouseCoopers
LLP or another nationally recognized accounting firm, stating that such firm has
reviewed the Initial Contracts on a statistical sampling basis and setting forth
the results of such review.
f. Copies of resolutions of the board of directors of the Seller or of
the executive committee of the board of directors of the Seller approving the
execution, delivery and performance of this Agreement, the creation of the Trust
and the transactions contemplated hereunder, certified in each case by the
secretary or an assistant secretary of the Seller.
g. Officially certified recent evidence of due incorporation and good
standing of the Seller under the laws of the State of Minnesota.
h. Evidence of filing with the Secretary of State of Minnesota of UCC-1
financing statements, (i) executed by the Originator as debtor, naming the
Seller as secured party and listing the Contracts as collateral, and (ii)
executed by the Seller as debtor, naming the Trustee as secured party and
listing the Contracts as collateral.
i. The Land-and-Home Contract File for each Initial and Additional
Contract that is a Land-and-Home Contract.
j. An executed copy of the Assignment of the Seller substantially in the
form of Exhibit D hereto.
2-2
k. An Officer's Certificate listing the Servicer's Servicing Officers.
l. Evidence of continued coverage of the Servicer under the Errors and
Omissions Protection Policy.
m. Evidence of deposit in the Certificate Account of all funds received
with respect to the Initial and Additional Contracts after the Cut-off Date to
the Closing Date, other than amounts due on or before the Cut-off Date, together
with an Officer's Certificate to the effect that such amount is correct.
n. An Officer's Certificate confirming that the Originator's internal
audit department has reviewed the original or a copy of each Initial and
Additional Contract and each related Contract File or Land-and-Home Contract
File, as applicable, that each Initial and Additional Contract and related
Contract File or Land-and-Home Contract File, as applicable, conforms in all
material respects with the List of Contracts and that each such Contract File or
Land-and-Home Contract File, as applicable, is complete in all material respects
and that each Manufactured Home securing a Contract is covered by a Hazard
Insurance Policy as required by Section 3.02(f).
o. A letter from ▇▇▇▇▇'▇ confirming that it has assigned the Class A
Certificates a rating of "Aaa," the Class M-1 Certificates a rating of "Aa2,"
the Class M-2 Certificates a rating of "A2," and the Class B-1 Certificates a
rating of "Baa2."
p. A letter from Fitch confirming that it has assigned the Class A
Certificates a rating of "AAA," the Class M-1 Certificates a rating of "AA," the
Class M-2 Certificates a rating of "A," and the Class B-1 Certificates a rating
of "BBB."
q. A letter from Standard & Poor's confirming that it has assigned the
Class A Certificates a rating of "AAA," the Class M-1 Certificates a rating of
"AA," the Class M-2 Certificates a rating of "A," and the Class B-1 Certificates
a rating of "BBB."
r. The demand note described in Section 3.06(c)(v).
s. An executed copy of the Transfer Agreement.
t. Evidence of the deposit of $0 in the Staged-Funding Contract Reserve
Account.
u. Evidence of the deposit of $0 in the Capitalized Interest Account.
v. Evidence of the deposit of $229,218.86 in the Pre-Funding Subaccount.
w. Evidence of the deposit in the Undelivered Contract Subaccount of an
amount equal to the difference between the aggregate Cut-off Date Principal
Balances of the Initial and Additional Contracts and the aggregate Cut-off Date
Principal Balances of the Undelivered Contracts.
x. Any other documents or certificates that the Trustee may reasonably
request.
2-3
SECTION 2.03 Conveyance of the Subsequent Contracts.
--------------------------------------
a. Subject to the conditions set forth in paragraph (b) below, in
consideration of the Trustee's delivery on the related Subsequent Transfer Dates
to or upon the order of the Seller of all or a portion of the balance of funds
in the Pre-Funding Account, the Seller shall on any Subsequent Transfer Date
sell, transfer, assign, set over and convey to the Trust by execution and
delivery of a Subsequent Transfer Instrument, all the right, title and interest
of the Seller in and to the Subsequent Contracts identified on the List of
Contracts attached to the Subsequent Transfer Instrument, including all rights
to receive payments on or with respect to the Subsequent Contracts due after the
applicable Cut-off Date, and all items with respect to such Subsequent Contracts
in the related Contract Files and Land-and-Home Contract Files. The transfer to
the Trustee by the Seller of the Subsequent Contracts shall be absolute and is
intended by the Seller, the Trustee and the Certificateholders to constitute and
to be treated as a sale of the Subsequent Contracts by the Seller to the Trust.
The purchase price paid by the Trustee shall be one hundred percent (100%)
of the aggregate Cut-off Date Principal Balances of such Subsequent Contracts.
The purchase price of Subsequent Contracts shall be paid solely with amounts in
the Pre-Funding Account. This Agreement shall constitute a fixed price contract
in accordance with Section 860G(a)(3)(A)(ii) of the Code.
b. The Seller shall transfer the Subsequent Contracts to the Trustee, and
the Trustee shall release funds from the Pre-Funding Account, only upon the
satisfaction of each of the following conditions on or prior to the related
Subsequent Transfer Date:
(i) the Seller shall have provided the Trustee with an Addition
Notice at least five Business Days prior to the Subsequent Transfer Date
and shall have provided any information reasonably requested by the Trustee
with respect to the Subsequent Contracts;
(ii) the Seller shall have delivered the related Land-and-Home
Contract File for each Subsequent Land-and-Home Contract to the Custodian
at least two Business Days prior to the Subsequent Transfer Date;
(iii) the Seller shall have delivered to the Trustee a duly executed
Subsequent Transfer Instrument substantially in the form of Exhibit P,
which shall include a List of Contracts identifying the related Subsequent
Contracts;
(iv) as of each Subsequent Transfer Date, the Seller shall not be
insolvent nor shall it have been made insolvent by such transfer nor shall
it be aware of any pending insolvency, as certified in an Officer's
Certificate substantially in the form attached hereto as Exhibit Q;
(v) such sale and transfer shall not result in a material adverse
tax consequence to the Trust (including the Master REMIC, Intermediate
REMIC and Subsidiary REMIC) or the Certificateholders;
(vi) the Pre-Funding Period shall not have ended;
2-4
(vii) the Seller shall have delivered to the Trustee an Officer's
Certificate, substantially in the form attached hereto as Exhibit Q,
confirming the satisfaction of each condition precedent and the
representations specified in this Section 2.03 and in Sections 3.01 and
3.03; and
(viii) the Seller and the Originator shall have delivered to the
Trustee Opinions of Counsel addressed to the Rating Agencies and the
Trustee with respect to the transfer of the Subsequent Contracts
substantially in the form of the Opinions of Counsel delivered to the
Trustee on the Closing Date regarding certain bankruptcy, corporate and tax
matters.
(ix) the Seller shall have delivered to the Trustee a copy of the
executed Subsequent Transfer Agreement between the Originator and the
Seller, substantially in the form of Exhibit A to the Transfer Agreement
and dated as of the Subsequent Transfer Date.
c. Before the last day of the Pre-Funding Period, the Seller shall
deliver to the Trustee:
(i) A letter from PricewaterhouseCoopers LLP or another nationally
recognized accounting firm retained by the Seller (with copies provided to
the Rating Agencies, the Underwriters and the Trustee) that is in form,
substance and methodology the same as that delivered under Section 2.02(e)
of this Agreement, except that it shall address the Subsequent Contracts
and their conformity in all material respects to the characteristics
described in Section 3.04(c) of this Agreement.
(ii) Evidence that as a result of the purchase by the Trust of the
Subsequent Contracts, the Class A, Class M and Class B-1 Certificates shall
not receive from any of the Rating Agencies a lower credit rating than the
rating assigned to such Certificates as of the Closing Date.
(iii) Evidence that the aggregate amount on deposit in the Pre-
Funding Account and the Staged-Funding Contract Reserve Account as of the
Closing Date, minus the aggregate Cut-off Date Principal Balance of any
Subsequent Contracts that had been specifically identified as Subsequent
Contracts as of the Closing Date (and were purchased by the Trust on or
before the first Remittance Date), did not exceed 25% of the aggregate
Original Principal Balance of the Master Certificates.
SECTION 2.04 Acceptance by Trustee.
---------------------
a. On the Closing Date and each Subsequent Transfer Date, if the
conditions set forth in Section 2.02 and 2.03, respectively, have been
satisfied, the Trustee shall deliver a certificate to the Seller substantially
in the form of Exhibit G hereto acknowledging conveyance of the Contracts,
identified on the applicable List of Contracts and the related Contract Files
and Land-and-Home Contract Files to the Trustee and declaring that the Trustee,
directly or through a custodian, will hold all Contracts that have been
delivered in trust, upon the terms herein set forth, for the use and benefit of
all Certificateholders and on the Closing Date the Trustee shall
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issue to or upon the order of the Seller Certificates representing ownership of
a beneficial interest in 100% of the Trust.
b. If, in its review of the Land-and-Home Contract Files as described in
Exhibit G, the Trustee or its Custodian discovers a breach of the
representations or warranties set forth in Sections 2.02(n), 3.02, 3.03, 3.04 or
3.05, the Seller and the Originator shall cure such breach or repurchase or
replace such Contract pursuant to Section 3.06.
SECTION 2.05 REMIC Provisions.
----------------
a. The Originator, as Servicer, and the Class C Subsidiary
Certificateholder, Class C Intermediate Certificateholder and Class C Master
Certificateholder, by acceptance thereof, each agrees that, in accordance with
the requirements of Section 860D(b)(1) of the Code, the federal tax return of
each of the Subsidiary REMIC, Intermediate REMIC and Master REMIC for its first
taxable year shall provide that the Subsidiary REMIC, Intermediate REMIC or
Master REMIC, as the case may be elects to be treated as a REMIC for such
taxable year and all subsequent taxable years. In furtherance of the foregoing,
the Trustee (at the direction of the Originator, the Seller or the Servicer) and
the Originator, the Seller and the Servicer shall take, or refrain from taking,
all such action as is necessary to maintain the status of each of the Subsidiary
REMIC, Intermediate REMIC or Master REMIC as a REMIC under the REMIC provisions
of the Code, including, but not limited to, the taking of such action as is
necessary to cure any inadvertent termination of REMIC status.
b. The Regular Certificates are being issued in twelve classes and are
hereby designated by the Originator as constituting the "regular interests" in
the Master REMIC for the purposes of Section 860G(a)(1) of the Code. The
following terms of the Regular Certificates are irrevocably established as of
the Closing Date:
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Original Principal
Balance (or
Remittance Rate Notional Principal
Class Per Annum Amount*) Maturity Date
---------------------- ----------------- ------------------ ------------------
Class A-1A A floating rate $ 70,000,000 July 2032
per annum equal
to the lesser of
(a) one-month
LIBOR plus 0.13%
and (b) the
Adjusted Weighted
Average Contract
Rate
Class A-1B 5.010% 59,000,000 July 2032
Class A-2 5.245% 22,300,000 July 2032
Class A-3 5.655% 63,400,000 July 2032
Class A-4 6.210% 96,200,000 July 2032
Class A-5 6.990%/(1)/ 175,100,000 July 2032
Class A-IO 2.500%/(2)/ *120,000,000 July 2032
Class M-1 7.535%/(3)/ 36,000,000 July 2032
Class M-2 7.970%/(3)/ 30,000,000 July 2032
Class B-1 8.915%/(3)/ 30,000,000 July 2032
Class B-2 11.250%/(3)/ 18,000,000 July 2032
Class B-3I /(4)/
___________
/(1)/ A floating rate (determined each Due Period as of each Remittance
Date) equal to the Adjusted Weighted Average Contract Rate, but in no
event greater than (i) for each Remittance Date prior to and including
the first Remittance Date on which the Pool Scheduled Principal
Balance is equal to or less than 20% of the Cut-off Date Pool
Principal Balance, 6.990% per annum, and (ii) for each Remittance Date
after the first Remittance Date on which the Pool Scheduled Principal
Balance is equal to or less than 20% of the Cut-off Date Pool
Principal Balance, 7.490% per annum.
/(2)/ The Class A-IO Certificate will receive each Remittance Date the
distribution on such Remittance Date to the Class I-AIO Interest under
Section 8.03(b) (1), which is equivalent to interest accrued at the
Class A-IO Remittance Rate on the Class A-IO Notional Principal
Amount.
/(3)/ A floating rate (determined monthly on each Remittance Date) equal to
the Adjusted Weighted Average Contract Rate, but in no event greater
than the related Remittance Rate specified above.
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/(4)/ The Class B-3I Certificates are interest-only Certificates.
The Seller does not represent that any Class of Regular Certificates will, in
fact, mature on any given date. The Class C Master Certificate is being issued
in a single Class and is hereby designated by the Seller as constituting the
sole class of "residual interests" in the Master REMIC for purposes of Section
860G(a)(2) of the Code.
c. The Uncertificated Intermediate Interests are being issued in
twelve classes and are hereby designated by the Seller as constituting the
"regular interests" in the Intermediate REMIC for the purposes of Section
860G(a)(1) of the Code. The following terms of the Uncertificated Intermediate
Interests are irrevocably established as of the Closing Date:
Remittance Rate Per Original Principal
Class Annum Balance Maturity Date
-------------- --------------------- ----------------------- -----------------
Class I-A1A Adjusted Weighted $ 35,000,000 July 2032
Average Contract
Rate
Class I-A1B Adjusted Weighted 29,500,000 July 2032
Average Contract
Rate
Class I-A2 Adjusted Weighted 11,150,000 July 2032
Average Contract
Rate
Class I-A3 Adjusted Weighted 31,700,000 July 2032
Average Contract
Rate
Class I-A4 Adjusted Weighted 48,100,000 July 2032
Average Contract
Rate
Class I-A5 Adjusted Weighted 87,550,000 July 2032
Average Contract
Rate
Class I-AIO 2.500% per annum $ 0 July 2032
through and
including the
Remittance Date in
January 2007 and 0%
thereafter
Class I-M1 Adjusted Weighted 18,000,000 July 2032
Average Contract
Rate
2-8
Class I-M2 Adjusted Weighted 15,000,000 July 2032
Average Contract
Rate
Class I-B1 Adjusted Weighted 15,000,000 July 2032
Average Contract
Rate
Class I-B2 Adjusted Weighted 9,000,000 July 2032
Average Contract
Rate
Class I-Accrual Adjusted Weighted 300,000,000 July 2032
Average Contract
Rate
The Seller does not represent that any Class of Uncertificated Intermediate
Interests will, in fact, mature on any given date. The Class C Intermediate
Certificate is being issued in a single Class and is hereby designated by the
Seller as constituting the sole class of "residual interests" in the
Intermediate REMIC for purposes of Section 860G(a)(2) of the Code.
d. The Uncertificated Subsidiary Interests are being issued in
twenty-four classes and are hereby designated by the Seller as constituting the
"regular interests" in the Subsidiary REMIC for the purposes of Section
860G(a)(1) of the Code. The following terms of the Uncertificated Subsidiary
Interests are irrevocably established and the Closing Date:
Pass-Through Rate Original Principal
Class Per Annum Balance Maturity Date
-------------- ---------------------- ------------------------- ----------------
Class S-1 Weighted Average $480,000,000 July 2032
Contract Rate
Class S-2(1) Weighted Average 2,600,000 July 2032
Contract Rate
Class S-2(2) Weighted Average 2,600,000 July 2032
Contract Rate
Class S-2(3) Weighted Average 2,800,000 July 2032
Contract Rate
Class S-2(4) Weighted Average 2,800,000 July 2032
Contract Rate
Class S-2(5) Weighted Average 3,000,000 July 2032
Contract Rate
Class S-2(6) Weighted Average 3,000,000 July 2032
Contract Rate
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Class S-2(7) Weighted Average 3,000,000 July 2032
Contract Rate
Class S-2(8) Weighted Average 3,000,000 July 2032
Contract Rate
Class S-2(9) Weighted Average 3,200,000 July 2032
Contract Rate
Class S-2(10) Weighted Average 2,800,000 July 2032
Contract Rate
Class S-2(11) Weighted Average 3,000,000 July 2032
Contract Rate
Class S-2(12) Weighted Average 2,800,000 July 2032
Contract Rate
Class S-2(13) Weighted Average 2,600,000 July 2032
Contract Rate
Class S-2(14) Weighted Average 2,800,000 July 2032
Contract Rate
Class S-2(15) Weighted Average 2,600,000 July 2032
Contract Rate
Class S-2(16) Weighted Average 2,400,000 July 2032
Contract Rate
Class S-2(17) Weighted Average 2,200,000 July 2032
Contract Rate
Class S-2(18) Weighted Average 2,200,000 July 2032
Contract Rate
Class S-2(19) Weighted Average 2,200,000 July 2032
Contract Rate
Class S-2(20) Weighted Average 2,200,000 July 2032
Contract Rate
Class S-2(21) Weighted Average 2,000,000 July 2032
Contract Rate
Class S-2(22) Weighted Average 2,000,000 July 2032
Contract Rate
Class S-2(23) Weighted Average 62,200,000 July 2032
Contract Rate
The Class C Subsidiary Certificate is being issued in a single Class and is
hereby designated by the Seller as the sole class of "residual interests" in the
subsidiary REMIC for purposes of Section 860G(a)(2) of the Code.
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e. The Closing Date, which is the day on which each of the Subsidiary
REMIC, Intermediate REMIC and Master REMIC will issue all of its regular and
residual interests, is hereby designated as the "startup day" of each of the
Subsidiary REMIC, Intermediate REMIC and Master REMIC within the meaning of
Section 860G(a)(9) of the Code.
f. After the Closing Date, neither the Trustee, the Originator, the
Seller nor any Servicer shall (i) accept any contribution of assets to the
Subsidiary REMIC, Intermediate REMIC or Master REMIC, (ii) dispose of any
portion of the Subsidiary REMIC, Intermediate REMIC or Master REMIC, other than
as provided in Sections 3.06, 3.07 and 8.05, (iii) engage in any "prohibited
transaction," as defined in Sections 860F(a)(2) and (5) of the Code, except as
may be contemplated by Section 3.06(c), (iv) accept any contribution after the
Closing Date that is subject to the tax imposed by Section 860G(d) of the Code
or (v) engage in any activity or enter into any agreement that would result in
the receipt by the Subsidiary REMIC, Intermediate REMIC or Master REMIC of any
"net income from foreclosure property" as defined in Section 860G(c)(2) of the
Code, unless, prior to any such action set forth in clauses (i), (ii), (iii),
(iv) or (v) the Trustee shall have received an unqualified Opinion of Counsel,
which opinion shall not be an expense of the Trust, stating that such action
will not, directly or indirectly, (A) adversely affect the status of the
Subsidiary REMIC, Intermediate REMIC or Master REMIC as a REMIC or the status of
the Uncertificated Subsidiary Interests as "regular interests" in the Subsidiary
REMIC, the status of the Class C Subsidiary Certificate as the sole class of
"residual interests" in the Subsidiary REMIC, the status of the Uncertificated
Intermediate Interests as "regular interests" in the Intermediate REMIC, the
status of the Class C Intermediate Certificate as the sole class of "residual
interests" in the Intermediate REMIC, the status of the Regular Certificates as
"regular interests" in the Master REMIC, or the status of the Class C Master
Certificate as the sole class of "residual interests" in the Master REMIC, (B)
affect the distributions payable hereunder to the Certificateholders or (C)
result in the imposition of any lien, charge or encumbrance upon the Subsidiary
REMIC, Intermediate REMIC or Master REMIC.
g. Upon the acquisition of any real property (including interests in real
property), or any personal property incident thereto, in connection with the
default of a Contract, the Servicer and the Trustee (at the direction of the
Servicer) shall take, or cause to be taken, such action as is necessary to sell
or otherwise dispose of such property within such period as is then required by
the Code in order for such property to qualify as "foreclosure property" within
the meaning of Section 860G(a)(8) of the Code, unless the Servicer and the
Trustee receive an Opinion of Counsel to the effect that the holding by the
Subsidiary REMIC, Intermediate REMIC or Master REMIC of such property subsequent
to the period then permitted by the Code will not result in the imposition of
any taxes on "prohibited transactions" of the Subsidiary REMIC, Intermediate
REMIC or Master REMIC, as defined in Section 860F of the Code, or cause the
Subsidiary REMIC, Intermediate REMIC or Master REMIC to fail to qualify as a
REMIC at any time that the Uncertificated Subsidiary Interests, Class C
Subsidiary Certificate, Uncertificated Intermediate Interests, Class C
Intermediate Certificate, Regular Certificates or Class C Master Certificate are
outstanding. The Servicer shall manage, conserve, protect and operate such real
property, or any personal property incident thereto, so that such property will
not fail to qualify as "foreclosure property," as defined in Section 860G(a)(8)
of the Code, and that the management, conservation, protection and operation of
such property will not result in the
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receipt by the Subsidiary REMIC, Intermediate REMIC or Master REMIC of any
"income from nonpermitted assets," within the meaning of Section 860F(a)(2)(B)
of the Code.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
------------------------------
Each of the Seller and Originator makes the following representations and
warranties on which the Trustee will rely in accepting the Contracts in trust
and issuing the Certificates on behalf of the Trust. The repurchase or
substitution obligation of the Originator set forth in Section 3.06 constitutes
the sole remedy available to the Trust or the Certificateholders for a breach of
a representation or warranty of the Originator set forth in Section 2.02(n),
3.02, 3.03, 3.04 or 3.05 of this Agreement.
SECTION 3.01 Representations and Warranties Regarding the Seller.
---------------------------------------------------
The Seller represents and warrants to the Trustee and the
Certificateholders, effective on the Closing Date and each Subsequent Transfer
Date, that:
a. Organization and Good Standing. The Seller is a corporation duly
------------------------------
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and has the corporate power to own its assets
and to transact the business in which it is currently engaged. The Seller is
duly qualified to do business as a foreign corporation and is in good standing
in each jurisdiction in which the character of the business transacted by it or
properties owned or leased by it requires such qualification and in which the
failure so to qualify would have a material adverse effect on the business,
properties, assets, or condition (financial or other) of the Seller.
b. Authorization; Binding Obligations. The Seller has the power and
----------------------------------
authority to make, execute, deliver and perform this Agreement and all of the
transactions contemplated under this Agreement, and to create the Trust and
cause it to make, execute, deliver and perform its obligations under this
Agreement and has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement and to cause the Trust to
be created. When executed and delivered, this Agreement will constitute the
legal, valid and binding obligation of the Seller enforceable in accordance with
its terms, except as enforcement of such terms may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors' rights
generally and by the availability of equitable remedies.
c. No Consent Required. The Seller is not required to obtain the consent
-------------------
of any other party or any consent, license, approval or authorization from, or
registration or declaration with, any governmental authority, bureau or agency
in connection with the execution, delivery, performance, validity or
enforceability of this Agreement.
d. No Violations. The execution, delivery and performance of this
-------------
Agreement by the Seller will not violate any provision of any existing law or
regulation or any order or decree of any court or the Articles of Incorporation
or Bylaws of the Seller, or constitute a material breach of any mortgage,
indenture, contract or other agreement to which the Seller or Originator is a
party or by which the Seller may be bound.
e. Litigation. No litigation or administrative proceeding of or before
----------
any court, tribunal or governmental body is currently pending, or to the
knowledge of the Seller threatened,
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against the Seller or any of its properties or with respect to this Agreement or
the Certificates which, if adversely determined, would in the opinion of the
Seller have a material adverse effect on the transactions contemplated by this
Agreement.
f. Licensing. The Seller is duly registered as a finance company in each
---------
state in which Contracts were originated, to the extent such registration is
required by applicable law.
SECTION 3.02 Representations and Warranties Regarding Each Contract.
------------------------------------------------------
The Originator has made the following representations and warranties to the
Seller in the Transfer Agreement, which representations and warranties the
Seller has assigned to the Trustee for the benefit of the Certificateholders, as
of the Closing Date with respect to each Initial and Additional Contract, and as
of the applicable Subsequent Transfer Date with respect to each Subsequent
Contract identified on the List of Contracts attached to the related Subsequent
Transfer Agreement:
a. List of Contracts. The information set forth in the applicable List
-----------------
of Contracts is true and correct as of its date.
b. Payments. As of the Cut-off Date, the most recent scheduled payment
--------
was made by or on behalf of the Obligor (without any advance from the Originator
or any Person acting at the request of the Originator) or was not past due for
more than 59 days (in the case of an Initial or Additional Contract) or 30 days
(in the case of a Subsequent Contract).
c. No Waivers. The terms of the Contract have not been waived, altered
----------
or modified in any respect, except by instruments or documents identified in the
Contract File or Land-and-Home Contract File, as applicable.
d. Binding Obligation. The Contract is the legal, valid and binding
------------------
obligation of the Obligor thereunder and is enforceable in accordance with its
terms, except as such enforceability may be limited by laws affecting the
enforcement of creditors' rights generally.
e. No Defenses. The Contract is not subject to any right of rescission,
-----------
setoff, counterclaim or defense, including the defense of usury, and the
operation of any of the terms of the Contract or the exercise of any right
thereunder will not render the Contract unenforceable in whole or in part or
subject to any right of rescission, setoff, counterclaim or defense, including
the defense of usury, and no such right of rescission, setoff, counterclaim or
defense has been asserted with respect thereto.
f. Insurance Coverage. The Manufactured Home securing the Contract is
------------------
covered by a Hazard Insurance Policy in the amount required by Section 5.09.
Each Manufactured Home secured by an FHA/VA Contract which was, at the time of
origination of the related Contract, located within a federally designated
special flood hazard area is covered by insurance coverage at least equal to
that required by Section 5.09 or such lesser coverage as may be available under
the federal flood insurance program. With respect to any other Contract that is
not an FHA/VA Contract, the Originator has obtained: (a) a statement from the
Obligor's insurance agent that the Manufactured Home was, at the time of
origination of the Contract, not in a federally designated special flood hazard
area; or (b) evidence that, at the time of origination, flood insurance was in
3-2
effect, which coverage is at least equal to that required by Section 5.09 or
such lesser coverage as may be available under the federal flood insurance
program. All premiums due as of the Closing Date on such insurance have been
paid in full.
g. Origination. The Contract was originated by a manufactured housing
-----------
dealer and purchased by the Originator, or originated by the Originator
directly, in the regular course of its business.
h. Lawful Assignment. The Contract was not originated in and is not
-----------------
subject to the laws of any jurisdiction whose laws would make the transfer of
the Contract pursuant to this Agreement or pursuant to transfers of
Certificates, or the ownership of the Contract by the Trust, unlawful or render
the Contract unenforceable.
i. Compliance with Law. At the date of origination of the Contract, all
-------------------
requirements of any federal and state laws, rules and regulations applicable to
the Contract, including, without limitation, usury, truth in lending and equal
credit opportunity laws, have been complied with, and the Originator shall for
at least the period of this Agreement, maintain in its possession, available for
the Trustee's inspection, and shall deliver to the Trustee upon demand, evidence
of compliance with all such requirements. Such compliance is not affected by
the Trust's ownership of the Contract.
j. Contract in Force. The Contract has not been satisfied or
-----------------
subordinated in whole or in part or rescinded, and the Manufactured Home
securing the Contract has not been released from the lien of the Contract in
whole or in part.
k. Valid Security Interest. Each Contract (other than the Land-and-Home
-----------------------
Contracts) creates a valid and enforceable perfected first priority security
interest in favor of the Originator in the Manufactured Home covered thereby as
security for payment of the Cut-off Date Principal Balance of such Contract.
The Originator has assigned all of its right, title and interest in such
Contract, including the security interest in the Manufactured Home covered
thereby, to the Seller, and the Seller has assigned all of its right, title and
interest in such Contract, including the security interest in the Manufactured
Home covered thereby, to the Trustee. The Trustee has and will have a valid and
perfected and enforceable first priority security interest in such Contract and
Manufactured Home.
Each Mortgage is a valid first lien in favor of the Seller on real
property securing the amount owed by the Obligor under the related Land-and-Home
Contract subject only to (a) the lien of current real property taxes and
assessments, (b) covenants, conditions and restrictions, rights of way,
easements and other matters of public record as of the date of recording of such
Mortgage, such exceptions appearing of record being acceptable to mortgage
lending institutions generally in the area wherein the property subject to the
Mortgage is located or specifically reflected in the appraisal obtained in
connection with the origination of the related Land-and-Home Contract obtained
by the Seller and (c) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the security
intended to be provided by such Mortgage. Each Land-and-Home Contract is
covered by an American Land Title Association, or equivalent form, lender's
title insurance policy. The Seller has assigned all of its right, title and
interest in such Land-and-Home Contract and related Mortgage,
3-3
including the security interest in the Manufactured Home covered thereby, to the
Trustee. The Trustee has and will have a valid and perfected and enforceable
first priority security interest in such Land-and-Home Contract.
l. Capacity of Parties. The signature(s) of the Obligor(s) on the
-------------------
Contract are genuine and all parties to the Contract had full legal capacity to
execute the Contract.
m. Good Title. In the case of a Contract purchased from a manufactured
----------
housing dealer, the Originator purchased the Contract for fair value and took
possession thereof in the ordinary course of its business, without knowledge
that the Contract was subject to a security interest. The Originator has not
sold, assigned or pledged the Contract to any person and prior to the transfer
of the Contract by the Originator to the Seller under the terms of the Transfer
Agreement, the Originator had good and marketable title thereto free and clear
of any encumbrance, equity, loan, pledge, charge, claim or security interest and
was the sole owner thereof with full right to transfer the Contract to the
Seller. With respect to any Contract bearing a stamp indicating that such
Contract has been sold to another party, such other party's interest in such
Contract has been released.
n. No Defaults. As of the applicable Cut-off Date, there was no default,
-----------
breach, violation or event permitting acceleration existing under the Contract
and no event which, with notice and the expiration of any grace or cure period,
would constitute such a default, breach, violation or event permitting
acceleration under such Contract (except payment delinquencies permitted by
clause (b) above). The Originator has not waived any such default, breach,
violation or event permitting acceleration except payment delinquencies
permitted by clause (b) above. As of the Closing Date or the Subsequent
Transfer Date, as applicable, the related Manufactured Home is, to the best of
the Originator's knowledge, free of damage and in good repair. To the best of
the Originator's knowledge, no Manufactured Home has suffered damage that is not
covered by a Hazard Insurance Policy, including, but not limited to, hurricanes,
earthquakes, floods, tornadoes, hailstorms, straight-line winds, sinkholes,
mudslides, volcanic eruptions, meteorites and other natural disasters.
o. No Liens. As of the Closing Date or the Subsequent Transfer Date, as
--------
applicable, there are, to the best of the Originator's knowledge, no liens or
claims which have been filed for work, labor or materials affecting the
Manufactured Home or any related Mortgaged Property securing the Contract which
are or may be liens prior to, or equal or coordinate with, the lien of the
Contract.
p. Equal Installments. Except for 95 Step-up Rate Contracts included
------------------
among the Initial Contracts and 8 Step-up Rate Contracts included among the
Additional Contracts, each Contract has a fixed Contract Rate and provides for
level monthly payments which fully amortize the loan over its term. Of the
Step-up Rate Contracts which are still bearing interest at their initial
Contract Rates, 98 provide for two rate increases and the remainder provide for
a single rate increase.
q. Enforceability. The Contract contains customary and enforceable
--------------
provisions so as to render the rights and remedies of the holder thereof
adequate for the realization against the collateral of the benefits of the
security provided thereby.
3-4
r. One Original. There is only one original executed Contract (other
------------
than the original executed copy retained by the Obligor), which Contract has
been delivered to the Trustee or its custodian on or before the Closing Date or
the Subsequent Transfer Date, as applicable. Each Contract (other than the
Land-and-Home Contracts) has been stamped to reflect the assignment of such
Contract to the Trustee.
s. Loan-to-Value Ratio. At the time of their origination all of the
-------------------
Contracts had Loan-to-Value Ratios not greater than 100%; if the related
Manufactured Home was new at the time such Contract was originated, the original
principal balance of such Contract did not exceed 130% of the manufacturer's
invoice price, plus 100% of the taxes and license fees, 130% of the freight
charges, 100% of the dealer's cost of additional dealer-installed equipment (not
to exceed 25% of the original principal balance of such Contract in all states
except California; not to exceed 70% of the manufacturer's invoice price in
California if required to meet park requirements) and up to $1,500 of set-up
costs per module.
t. Primary Resident. At the time of origination of the Contract the
----------------
Obligor was the primary resident of the related Manufactured Home.
u. Not Real Estate. With respect to each Contract other than a Land-and-
---------------
Home Contract, the related Manufactured Home is not considered or classified as
part of the real estate on which it is located under the laws of the
jurisdiction in which it is located.
v. Notation of Security Interest. With respect to each Contract other
-----------------------------
than a Land-and-Home Contract, if the related Manufactured Home is located in a
state in which notation of a security interest on the title document is required
or permitted to perfect such security interest, the title document shows, or if
a new or replacement title document with respect to such Manufactured Home is
being applied for such title document will be issued within 180 days and will
show, the Originator or its assignee as the holder of a first priority security
interest in such Manufactured Home; if the related Manufactured Home is located
in a state in which the filing of a financing statement under the UCC is
required to perfect a security interest in manufactured housing, such filings or
recordings have been duly made and show the Originator or its assignee as
secured party. If the related Manufactured Home secures a Land-and-Home
Contract, such Manufactured Home is subject to a Mortgage properly filed in the
appropriate public recording office or such Mortgage will be properly filed in
the appropriate public recording office within 180 days, naming the Seller as
mortgagee. In either case, the Trustee has the same rights as the secured party
of record would have (if such secured party were still the owner of the
Contract) against all Persons (including the Seller and the Originator and any
trustee in bankruptcy of the Seller or the Originator) claiming an interest in
such Manufactured Home.
w. Secondary Mortgage Market Enhancement Act. The related Manufactured
-----------------------------------------
Home is a "manufactured home" within the meaning of ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code,
Section 5402(6). Each manufactured housing dealer from whom the Originator
purchased such Contract, if any, was then approved by the Originator in
accordance with the requirements of the Secretary of Housing and Urban
Development set forth in 24 CFR (S) 201.27. At the origination of each
Contract, the Originator was approved for insurance by the Secretary of Housing
and Urban Development pursuant to Section 2 of the National Housing Act.
3-5
x. Qualified Mortgage. The Contract represents a "qualified mortgage"
------------------
within the meaning of Section 860G(a)(3) of the Code. The Originator represents
and warrants that, either as of the date of origination or the Closing Date, the
fair market value of the property securing each Contract was not less than 80%
of the "adjusted issue price" (within the meaning of the REMIC Provisions) of
such Contract.
SECTION 3.03 Additional Representations and Warranties. The Seller hereby
-----------------------------------------
represents and warrants to the Trustee for the benefit of the
Certificateholders, as of the Closing Date with respect to each Initial and
Additional Contract and as of each Subsequent Transfer Date with respect to each
Subsequent Contract identified on the List of Contracts attached to the related
Subsequent Transfer Instrument:
a. Lawful Assignment. The Contract was not originated in and is not
-----------------
subject to the laws of any jurisdiction whose laws would make the transfer of
the Contract under this Agreement or pursuant to transfers of the Certificates
unlawful or render the Contract unenforceable. The Seller has duly executed a
valid blanket assignment of the Contracts transferred to the Trust, and has
transferred all its right, title and interest in such Contracts. The blanket
assignment, any and all documents executed and delivered by the Seller pursuant
to Sections 2.01(b) and 2.03(b), and this Agreement each constitutes the legal,
valid and binding obligation of the Seller enforceable in accordance with its
respective terms.
b. Good Title. The Seller is the sole owner of the Contract and has the
----------
authority to sell, transfer and assign such Contract to the Trust under the
terms of this Agreement. There has been no assignment, sale or hypothecation of
the Contract by the Seller, which does not terminate upon sale of the Contract
to the Trust. The Seller has good and marketable title to the Contract, free
and clear of any encumbrance, equity, loan, pledge, charge, claim, lien or
encumbrance of any type and has full right to transfer the Contract to the
Trust.
SECTION 3.04 Representations and Warranties Regarding the Contracts in the
-------------------------------------------------------------
Aggregate.
---------
The Originator has represented and warranted to the Seller in the Transfer
Agreement, which representations and warranties the Seller has assigned to the
Trustee for the benefit of the Certificateholders, as of the Closing Date with
respect to the Initial and Additional Contracts, and as of each Subsequent
Transfer Date with respect to the related Subsequent Contracts, that:
a. Amounts. The aggregate principal amounts payable by Obligors under
-------
the Contracts (assuming all Staged-Funding Contracts were fully disbursed) as of
the Cut-off Date equal the Cut-off Date Pool Principal Balance. The aggregate
principal amounts payable by Obligors under the Initial Contracts (assuming all
Staged-Funding Contracts included among the Initial Contracts were fully
disbursed) as of the Cut-off Date equal $537,014,241.35. The aggregate
principal amounts payable by Obligors under the Initial and Additional Contracts
(assuming all Staged-Funding Contracts included among the Additional Contracts
were fully disbursed) as of the Cut-off Date equal $599,998,579.66.
3-6
b. Characteristics of Initial and Additional Contracts. The Initial and
---------------------------------------------------
Additional Contracts have the following characteristics as of the Cut-off Date:
(i) of the Initial Contracts, the Obligors on not more than 11.07%
(by Cut-off Date Principal Balance) are located in any one state; of the
Initial and Additional Contracts, the Obligors on not more than 10.37% are
located in any one state, the Obligors on not more than 5% are located in
an area with the same zip code and the Obligors on not more than 1% are
located in California in an area with the same zip code;
(ii) no Initial or Additional Contract has a remaining maturity of
fewer than 3 months or more than 360 months;
(iii) the final scheduled payment date on the Initial or Additional
Contract with the latest maturity is in August 2031;
(iv) of the Initial Contracts, approximately 69.99% (by Cut-off
Date Principal Balance) is attributable to loans to purchase new
Manufactured Homes and approximately 30.01% to used Manufactured Homes; of
the Initial and Additional Contracts, approximately 70.10% is attributable
to loans to purchase new Manufactured Homes and approximately 29.90% to
used Manufactured Homes;
(v) no less than 28.02% of the Initial and Additional Contracts
(by Cut-off Date Principal Balance) is attributable to Land-and-Home
Contracts;
(vi) the Weighted Average Contract Rate of the Initial and
Additional Contracts as of the Cut-off Date is at least 12.71% per annum;
(vii) at least 70.43% of the Initial and Additional Contracts (by
Cut-off Date Principal Balance) is attributable to loans for the purchase
of multi-section Manufactured Homes;
(viii) the weighted average (by Cut-off Date Principal Balance) loan
to value ratio of the Initial and Additional Contracts is not more than
87.56%;
(ix) no Initial Contract was originated before June 7, 1984 and no
Additional Contract was originated before September 1, 1989; and
(x) not more than 31.40% of the Initial and Additional Contracts
(by Cut-off Date Principal Balance) are secured by Manufactured Homes
located in a mobile home park.
c. Characteristics of All Contracts. The Contracts have the following
--------------------------------
characteristics as of the end of the Pre-Funding Period:
(i) the Weighted Average Contract Rate is not less than 12.50%;
(ii) the weighted average (by Cut-off Date Pool Principal Balance)
Loan-to-Value Ratio of the Contracts is not more than 89%;
3-7
(iii) not less than 68% of the Cut-off Date Pool Principal Balance
is attributable to loans for the purchase of new Manufactured Homes;
(iv) not more than 30% of the Cut-off Date Pool Principal Balance
is attributable to loans for the purchase of single-section Manufactured
Homes, and not less than 70% of the Cut-off Date Pool Principal Balance is
attributable to loans for the purchase of double-section Manufactured
Homes;
(v) not less than 28% of the Cut-off Date Pool Principal Balance
is attributable to Land-and-Home Contracts;
(vi) not more than 32% of the Cut-off Date Pool Principal Balance
is attributable to loans secured by Manufactured Homes located in parks;
and
(vii) the final scheduled payment date on the Contract with the
latest maturity is not later than August 2031.
(viii) the percentage (by Scheduled Principal Balance) of the
Contracts scored under the Originator's "old" scoring system as of the
Post-Funding Remittance Date with a credit score (using the Originator's
"old" scoring system) of less than 185 will not be greater than 15%, and
the percentage (by Scheduled Principal Balance) of the Contracts scored
under the Originator's "new" scoring system as of the Post-Funding
Remittance Date with a pass-fail code (using the Originator's "new" scoring
system) of F0, F1, F2, F3 or F4 will not be greater than 20%;
(ix) not more than 20% of the Cut-off Date Pool Principal Balance
is attributable to loans for the purchase of Manufactured Homes that had
been repossessed; and
(x) not more than 15.50% of the Cut-off Date Pool Principal
Balance is attributable to loans with a lowside override.
d. Staged-Funding Contracts. Approximately $0 of the Initial and
------------------------
Additional Contracts, by Cut-off Date Principal Balance, are Staged-Funding
Contracts that had not been fully disbursed by the Cut-off Date. Approximately
$0 of such amount has been disbursed by the Closing Date, and approximately $0
remains to be disbursed on or before the Funding Termination Date.
e. Computer Tape. The Computer Tape made available by the Originator was
-------------
complete and accurate as of its date and includes a description of the same
Contracts that are described in the List of Contracts.
f. Marking Records. By the Closing Date or Subsequent Transfer Date, as
---------------
applicable, the Originator has caused the portions of the Electronic Ledger
relating to the Contracts to be clearly and unambiguously marked to indicate
that such Contracts constitute part of the Trust and are owned by the Trust in
accordance with the terms of the trust created hereunder.
3-8
g. No Adverse Selection. Except for the effect of the representations
--------------------
and warranties made in Sections 3.02 and 3.03 hereof, no adverse selection
procedures have been employed in selecting the Contracts.
SECTION 3.05 Representations and Warranties Regarding the Contract Files.
-----------------------------------------------------------
The Originator has represented and warranted to the Seller in the Transfer
Agreement, which representations and warranties the Seller has assigned to the
Trustee for the benefit of the Certificateholders, as of the Closing Date with
respect to the Initial and Additional Contracts, and as of each Subsequent
Transfer Date with respect to the related Subsequent Contracts, that:
a. Possession. Immediately prior to the Closing Date or the Subsequent
----------
Transfer Date, as applicable, the Originator will have possession of each
original Contract and the related Contract File or Land-and-Home Contract File
and there are and there will be no custodial agreements in effect materially and
adversely affecting the rights of the Originator to make, or cause to be made,
any delivery required hereunder.
b. Bulk Transfer Laws. The transfer, assignment and conveyance of the
------------------
Contracts and the Contract Files and Land-and-Home Contract Files by the
Originator pursuant to the Transfer Agreement is not subject to the bulk
transfer or any similar statutory provisions in effect in any applicable
jurisdiction.
SECTION 3.06 Repurchase of Contracts or Substitution of Contracts for
--------------------------------------------------------
Breach of Representations and Warranties.
----------------------------------------
a. The Originator shall repurchase a Contract, at its Repurchase Price,
not later than the first Determination Date that is 90 or more days after the
day on which the Originator, the Servicer, the Seller or the Trustee first
discovers or should have discovered a breach of a representation or warranty of
the Originator set forth in Sections 2.02(n), 3.02, 3.03 or 3.05 of this
Agreement that materially adversely affects the Trust's or the
Certificateholders' interest in such Contract and which breach has not been
cured; provided, however, that (i) in the event that a party other than the
Originator first becomes aware of such breach, such discovering party shall
notify the Originator in writing within five Business Days of the date of such
discovery and (ii) with respect to any Contract incorrectly described on the
List of Contracts with respect to unpaid principal balance, which the Originator
would otherwise be required to repurchase pursuant to this Section, the
Originator may, in lieu of repurchasing such Contract, deliver to the Seller for
deposit in the Certificate Account no later than the first Determination Date
that is 90 or more days from the date of such discovery cash in an amount
sufficient to cure such deficiency or discrepancy. Any such cash so deposited
shall be distributed to Certificateholders on the immediately following
Remittance Date as a collection of principal or interest on such Contract,
according to the nature of the deficiency or discrepancy. Notwithstanding any
other provision of this Agreement, the obligation of the Originator under this
Section shall not terminate upon a Service Transfer pursuant to Article VII.
Notwithstanding the foregoing, the Originator shall repurchase any Land-and-Home
Contract, at such Contract's Repurchase Price, or substitute for it an Eligible
Substitute Contract as described in Section 3.06(b), if the Seller has failed to
deliver the related Land-and-Home Contract File to the Trustee within 30 days of
the Closing Date.
3-9
b. On or prior to the date that is the second anniversary of the Closing
Date, the Originator, at its election, may substitute one or more Eligible
Substitute Contracts for any Contracts that it is obligated to repurchase
pursuant to Section 3.06(a) (such Contracts being referred to as the "Replaced
Contracts") upon satisfaction of the following conditions:
(i) the Originator shall have conveyed to the Seller the Contracts
to be substituted for the Replaced Contracts and the Contract Files related
to such Contracts and the Originator shall have marked the Electronic
Ledger indicating that such Contracts constitute part of the Trust;
(ii) the Contracts to be substituted for the Replaced Contracts are
Eligible Substitute Contracts and the Originator delivers an Officers'
Certificate, substantially in the form of Exhibit L-2 hereto, to the
Trustee certifying that such Contracts are Eligible Substitute Contracts;
(iii) the Originator shall have delivered to the Seller evidence of
filing of a UCC-1 financing statement executed by the Originator as debtor,
naming the Seller as secured party and the Seller shall have delivered to
the Trustee evidence of filing of a UCC-1 financing statement executed by
the Seller as debtor, naming the Trustee as secured party and filed in
Minnesota, listing such Contracts as collateral, or shall have delivered to
the Seller or the Trustee, as the case may be, an amended List of
Contracts;
(iv) in respect of Eligible Substitute Contracts that are Land-and-
Home Contracts:
(x) the Originator shall have delivered to the Seller, or its
Custodian, the related Land-and-Home Contract Files; and
(y) the Originator shall have delivered to the Trustee an opinion
of counsel satisfactory to the Trustee to the effect that the
Trustee holds a perfected first priority lien in the real
estate securing such Eligible Substitute Contracts, or evidence
of recordation of the assignment to the Trustee on behalf of
the Trust of (A) each Mortgage securing such Eligible
Contracts;
(v) the Originator shall have delivered to the Trustee an Opinion
of Counsel (a) to the effect that the substitution of such Contracts for such
Replaced Contracts will not cause the Master REMIC, Intermediate REMIC or
Subsidiary REMIC to fail to qualify as a REMIC at any time under then applicable
REMIC Provisions or cause any "prohibited transaction" that will result in the
imposition of a tax under such REMIC Provisions and (b) to the effect of
paragraph 9 of Exhibit F hereto; and
(vi) if the aggregate Scheduled Principal Balance of such Replaced
Contracts is greater than the aggregate Scheduled Principal Balance of the
Contracts being substituted, the Originator shall have delivered to the Seller
for deposit in the Certificate Account the amount of such excess and shall have
included in the Officers' Certificate required by clause (ii) above a
certification that such deposit has been made.
3-10
Upon satisfaction of such conditions, the Trustee shall add such Contracts
to, and delete such Replaced Contracts from, the List of Contracts. Such
substitution shall be effected prior to the first Determination Date that occurs
90 or more days after the Originator becomes aware, or should have become aware,
or receives written notice from the Trustee, of the breach referred to in
Section 3.06(a). Promptly after any substitution of a Contract, the Originator
shall give written notice of such substitution to the Rating Agencies.
c. (i) On or before the Funding Termination Date, the Originator or
the Seller shall deliver one or more Officer's Certificates to the Trustee,
identifying those Staged-Funding Contracts that have been fully disbursed
in accordance with the terms of such Contract on or before the Funding
Termination Date and specifying that portion of the funds held in the
Staged-Funding Contract Reserve Account attributable to those Staged-
Funding Contracts. On or before the Funding Termination Date, the
Originator or the Seller shall deliver an Officer's Certificate to the
Trustee, specifying any Staged-Funding Contracts which were not fully
disbursed by the Funding Termination Date (each Staged-Funding Contract
that was not so fully disbursed being hereinafter referred to as an
"Unfunded Contract"), and the Cut-off Date Principal Balance of each
Unfunded Contract.
(ii) On or before the Funding Termination Date, the Originator shall
either repurchase any Unfunded Contract in accordance with Section 3.06(a)
(or the unfunded portion thereof, by depositing in the Certificate Account
any undisbursed amount with respect to such Unfunded Contract), or shall
substitute an Eligible Substitute Contract for such Unfunded Contract in
accordance with Section 3.06(b). With respect to the repurchase of an
Unfunded Contract pursuant to this Section 3.06(c), an amount of the
Repurchase Price equal to the Unfunded Contract Shortfall attributable to
such Unfunded Contract shall be treated as a refund to the Trust of the
purchase price paid by the Trust for additional obligations of the Obligor
on such Contract under Section 2.01(c), and the remainder of the Repurchase
Price shall be treated as paid to the Trust for such Unfunded Contract.
(iii) If the Originator shall have failed to repurchase an Unfunded
Contract (or the unfunded portion thereof, by depositing in the Certificate
Account any undisbursed amount with respect to such Unfunded Contract) or
to substitute an Eligible Substitute Contract therefor in accordance with
subsection (ii) above, then the disbursed principal balance of such
Unfunded Contract as owned by the Trust shall not be increased after the
Funding Termination Date, notwithstanding any further disbursements that
may be made to the related Obligor by the Originator after the Funding
Termination Date. The Servicer shall thereafter allocate principal and
interest collected on the Contract between the Trust and the Originator on
a pro rata basis in accordance with the disbursed principal balance as of
the Funding Termination Date, with the result that payments of interest and
principal collected with respect to such disbursed principal balance as of
the Funding Termination Date shall be deemed collected by the Trust. The
aggregate differential between the Cut-off Date Principal Balance of all
such Unfunded Contracts as specified in the List of Contracts and the
disbursed principal balance of such Unfunded Contracts as of the Funding
Termination Date (the "Unfunded Contract Shortfall") shall be added to
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the Formula Principal Distribution Amount with respect to the Remittance
Date in May 2001.
(iv) On the Business Day prior to each Remittance Date until and
including the Remittance Date immediately following the Funding Termination
Date, the Originator shall pay any Class A Interest Shortfall, Class M-1
Interest Shortfall, Class M-2 Interest Shortfall or Class B-1 Interest
Shortfall occurring on such Remittance Date, if and to the extent such
shortfall is caused by the difference between (A) the interest that would
have been payable on all Staged-Funding Contracts in the related month had
such Contracts been fully disbursed on the Closing Date and (B) the
interest actually payable on such Contracts in the related month according
to the terms of such Contracts.
(v) To further evidence its obligation to repurchase Unfunded
Contracts pursuant to subsection (ii) above and to deposit any Class A
Interest Shortfall, Class M-1 Interest Shortfall, Class M-2 Interest
Shortfall and Class B-1 Interest Shortfall pursuant to subsection (iv)
above, the Originator shall deliver to the Trustee, on the Closing Date, a
demand note in an amount no less than the aggregate Cut-off Date Principal
Balances of the Staged-Funding Contracts. After the Funding Termination
Date or such earlier date on which the Originator either has fully
disbursed or repurchased each Staged-Funding Contract as required herein,
the Trustee shall return such demand note to the Originator for
cancellation and/or destruction.
d. Upon receipt by the Trust by deposit in the Certificate Account of the
Repurchase Price under subsection (a) or (c) above, or the delivery of an
Eligible Substitute Contract pursuant to subsection (b) or (c) above, and upon
receipt of a certificate of a Servicing Officer in the form attached hereto as
Exhibit L-1 or L-2, the Trustee shall convey and assign to the Originator all of
the Trust's right, title and interest in the repurchased Contract or Replaced
Contract without recourse, representation or warranty, except as to the absence
of liens, charges or encumbrances created by or arising as a result of actions
of the Trustee.
e. The Originator shall defend and indemnify the Trustee and the
Certificateholders against all costs, expenses, losses, damages, claims and
liabilities, including reasonable fees and expenses of counsel, arising out of
any claims which may be asserted against or incurred by any of them as a result
of any third-party action arising out of any breach of any such representation
and warranty.
SECTION 3.07 No Repurchase or Substitution Under Certain Circumstances.
---------------------------------------------------------
Notwithstanding any provision of this Agreement to the contrary, no
repurchase or substitution pursuant to Section 3.06 (other than a repurchase or
substitution pursuant to Section 3.06(c)) shall be made unless the Originator
obtains for the Trustee an Opinion of Counsel addressed to the Trustee that any
such repurchase or substitution would not, under the REMIC Provisions, (i) cause
the Subsidiary REMIC, Intermediate REMIC or Master REMIC to fail to qualify as a
REMIC while any regular interest in the Subsidiary REMIC, Intermediate REMIC or
Master REMIC, respectively, is outstanding, (ii) result in a tax on prohibited
transactions within the meaning of Section 860F(a)(2) of the Code or (iii)
constitute a contribution after the startup day subject to tax under Section
860G(d) of the Code. The Servicer shall attempt to obtain such
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Opinion of Counsel. In the case of a repurchase or deposit pursuant to Section
3.06(a) or 3.06(c), the Originator shall, notwithstanding the absence of such
opinion as to the imposition of any tax as the result of such purchase or
deposit, repurchase such Contract or make such deposit and shall guarantee the
payment of such tax by paying to the Trustee the amount of such tax not later
than five Business Days before such tax shall be due and payable to the extent
that amounts previously paid over to and then held by the Trustee pursuant to
Section 6.06 hereof are insufficient to pay such tax and all other taxes
chargeable under Section 6.06. Pursuant to Section 6.06, the Servicer is hereby
directed to withhold, and shall withhold and pay over to the Trustee, an amount
sufficient to pay such tax and any other taxes imposed on "prohibited
transactions" under Section 860F(a)(1) of the Code or imposed on "contributions
after start up date" under Section 860G(d) of the Code from amounts otherwise
distributable to Class C Subsidiary Certificateholders. The Servicer shall give
notice to the Trustee at the time of such repurchase of the amounts due from the
Originator pursuant to the guarantee of the Originator described above and
notice as to who should receive such payment.
The Trustee shall have no obligation to pay any such amounts pursuant to
this Section other than from moneys provided to it by the Originator or from
moneys held in the funds and accounts created under this Agreement. The Trustee
shall be deemed conclusively to have complied with this Section if it follows
the directions of the Originator.
In the event any tax that is guaranteed by the Originator pursuant to this
Section 3.07 is refunded to the Trust or otherwise is determined not to be
payable, the Originator shall be repaid the amount of such refund or that
portion of any guarantee payment made by the Originator that is not applied to
the payment of such tax.
SECTION 3.08 Staged-Funding Contract Reserve Account.
---------------------------------------
a. The Trustee shall establish the Staged-Funding Contract Reserve
Account on behalf of the Trust, which must be an Eligible Account, and shall
deposit therein the amount specified in Section 2.02(t). The Account shall be
entitled "U.S. Bank National Association, as Trustee for the benefit of holders
of Manufactured Housing Contract Senior/Subordinate Pass-Through Certificates,
Series 2001-1."
b. Upon receipt by the Trustee of an Officer's Certificate pursuant to
Section 3.06(c)(i) to the effect that one or more Staged-Funding Contracts have
been fully disbursed in accordance with the terms of such Contract, on or before
the Funding Termination Date, the Trustee shall release to the Seller that
portion of the funds held in the Staged-Funding Contract Reserve Account
attributable to those Staged-Funding Contracts (as specified in such Officer's
Certificate).
c. If the Originator fails to satisfy its obligations under Section
3.06(c)(ii) hereof the Trustee shall withdraw from the Staged-Funding Contract
Reserve Account that amount necessary to satisfy the Originator's obligations
under Section 3.06(c)(ii), and shall apply said funds in the fashion provided in
the second sentence in Section 3.06(c)(ii). Any amount so applied shall be
deposited in the Certificate Account and treated for all purposes under this
Agreement as an amount paid by the Originator to repurchase Contracts under
Section 3.06(c).
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d. The Staged-Funding Contract Reserve Account shall be part of the Trust
but not part of the Subsidiary REMIC, Intermediate REMIC or Master REMIC. The
Trustee on behalf of the Trust shall be the legal owner of the Staged-Funding
Contract Reserve Account. The Originator shall be the beneficial owner of the
Staged-Funding Contract Reserve Account, subject to the foregoing power of the
Trustee to apply amounts in the Staged-Funding Contract Reserve Account to
satisfy the obligations of the Originator under Section 3.06(c)(ii). Funds in
the Staged-Funding Contract Reserve Account shall, at the direction of the
Originator, be invested in Eligible Investments that mature no later than the
Funding Termination Date. All net income and gain from such investments shall
be distributed to the Originator on the Funding Termination Date. Any losses on
such investments shall be deposited in the Staged-Funding Contract Reserve
Account by the Originator out of its own funds immediately as realized. All
amounts earned on amounts on deposit in the Staged-Funding Contract Reserve
Account shall be taxable to the Originator.
e. Any funds remaining in the Staged-Funding Contract Reserve Account
after the Funding Termination Date shall be distributed to the Originator.
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ARTICLE IV
PERFECTION OF TRANSFER AND PROTECTION OF SECURITY INTERESTS
-----------------------------------------------------------
SECTION 4.01 Custody of Contracts.
--------------------
a. Subject to the terms and conditions of this Section the Trustee
appoints the Servicer to maintain custody of some or all of the Contract Files
for the benefit of the Certificateholders and the Trustee. The Servicer may
appoint the Custodian to maintain custody of some or all of the Contract Files.
The Custodian shall maintain custody of the Land-and-Home Contract Files. In
the event that the Trustee is no longer acting as Custodian of the Land-and-Home
Contract Files, upon execution and delivery of an agreement between the Trustee
and the Person assuming the duties of the Trustee hereunder as Custodian with
respect to the Land-and-Home Contract Files, the replacement Custodian shall
concurrently execute an acknowledgment of receipt of the Land-and-Home Contract
Files substantially in the form of Exhibit H hereto.
b. The Servicer agrees to maintain the related Contract Files at its
office where they are currently maintained, or at such other offices of the
Servicer in the State of Minnesota as shall from time to time be identified to
the Trustee by written notice. The Servicer may temporarily move individual
Contract Files or any portion thereof without notice as necessary to conduct
collection and other servicing activities in accordance with its customary
practices and procedures.
c. As custodian, the Servicer shall have and perform the following
powers and duties:
(i) hold the Contract Files on behalf of the Certificateholders and
the Trustee, maintain accurate records pertaining to each Contract to
enable it to comply with the terms and conditions of this Agreement,
maintain a current inventory thereof, conduct annual physical inspections
of Contract Files held by it under this Agreement and certify to the
Trustee annually that it continues to maintain possession of such Contract
Files;
(ii) implement policies and procedures, in writing and signed by a
Servicing Officer, with respect to persons authorized to have access to the
Contract Files on the Servicer's premises and the receipting for Contract
Files taken from their storage area by an employee of the Servicer for
purposes of servicing or any other purposes; and
(iii) attend to all details in connection with maintaining custody of the
Contract Files on behalf of the Certificateholders and the Trustee.
d. In performing its duties under this Section, the Servicer agrees to
act with reasonable care, using that degree of skill and care that it exercises
with respect to similar contracts owned and/or serviced by it. The Servicer
shall promptly report to the Trustee any failure by it to hold the Contract
Files as herein provided and shall promptly take appropriate action to remedy
any such failure. In acting as custodian of the Contract Files, the Servicer
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agrees further not to assert any beneficial ownership interests in the Contracts
or the Contract Files. The Servicer agrees to indemnify the Certificateholders
and the Trustee for any and all liabilities, obligations, losses, damages,
payments, costs or expenses of any kind whatsoever which may be imposed on,
incurred or asserted against the Certificateholders and the Trustee as the
result of any act or omission by the Servicer relating to the maintenance and
custody of the Contract Files; provided, however, that the Servicer will not be
liable for any portion of any such amount resulting from the negligence or
willful misconduct of any Certificateholder or the Trustee.
SECTION 4.02 Filings.
-------
On or prior to the Closing Date, the Originator shall cause the UCC-1
financing statement referred to in Section 2.02(h) to be filed. Trustee shall
cause to be filed all necessary continuation statements of the UCC-1 financing
statement. From time to time the Servicer shall take and cause to be taken such
actions and execute such documents as are necessary to perfect and protect the
Certificateholders' interest in the Contracts and their proceeds and the
Manufactured Homes against all other persons, including, without limitation, the
filing of financing statements, amendments thereto and continuation statements,
the execution of transfer instruments and the making of notations on or taking
possession of all records or documents of title. The Servicer will maintain the
Trustee's first priority perfected security interest in each Manufactured Home
and a first lien on each Mortgaged Property so long as the related Contract is
property of the Trust.
SECTION 4.03 Name Change or Relocation.
-------------------------
a. During the term of this Agreement, the Originator shall not change its
name, identity or structure or relocate its chief executive office without first
giving notice thereof to the Seller, the Trustee and the Servicer. In addition,
following any such change in the name, identity, structure or location of the
chief executive office of the Originator, the Originator shall give written
notice of any such change to Standard & Poor's, ▇▇▇▇▇'▇ and Fitch.
b. If any change in the Originator's name, identity or structure or the
relocation of its chief executive office would make any financing or
continuation statement or notice of lien filed under this Agreement seriously
misleading within the meaning of applicable provisions of the UCC or any title
statute or would cause any such financing or continuation statement or notice of
lien to become unperfected (whether immediately or with lapse of time), the
Originator, no later than five days after the effective date of such change,
shall file, or cause to be filed, such amendments or financing statements as may
be required to preserve, perfect and protect the Certificateholders' interest in
the Contracts and proceeds thereof and in the Manufactured Homes.
SECTION 4.04 Chief Executive Office.
----------------------
During the term of this Agreement, the Originator will maintain its chief
executive office in one of the States of the United States, except Tennessee.
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SECTION 4.05 Costs and Expenses.
------------------
The Servicer agrees to pay all reasonable costs and disbursements in
connection with the perfection and the maintenance of perfection, as against all
third parties, of the Certificateholders' right, title and interest in and to
the Contracts (including, without limitation, the security interests in the
Manufactured Homes granted thereby).
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ARTICLE V
SERVICING OF CONTRACTS
----------------------
SECTION 5.01 Responsibility for Contract Administration.
------------------------------------------
The Servicer will have the sole obligation to manage, administer, service
and make collections on the Contracts and perform or cause to be performed all
contractual and customary undertakings of the holder of the Contracts to the
Obligor. Conseco Finance Corp., if it is the Servicer, may delegate some or all
of its servicing duties to a wholly owned subsidiary of Conseco Finance Corp.,
for so long as such subsidiary remains, directly or indirectly, a wholly owned
subsidiary of Conseco Finance Corp. Notwithstanding any such delegation,
Conseco Finance Corp. shall retain all of the rights and obligations of the
Servicer hereunder. The Trustee, at the request of a Servicing Officer, shall
furnish the Servicer with any powers of attorney or other documents necessary or
appropriate to enable the Servicer to carry out its servicing and administrative
duties hereunder. Conseco Finance Corp. is hereby appointed the Servicer until
such time as any Service Transfer shall be effected under Article VII.
SECTION 5.02 Standard of Care.
----------------
In managing, administering, servicing and making collections on the
Contracts pursuant to this Agreement, the Servicer will exercise that degree of
skill and care consistent with the highest degree of skill and care that the
Servicer exercises with respect to similar contracts serviced by the Servicer;
provided, however, that (i) such degree of skill and care shall be at least as
favorable as the degree of skill and care generally applied by servicers of
manufactured housing installment sales contracts for institutional investors and
(ii) notwithstanding the foregoing, the Servicer shall not release or waive the
right to collect the unpaid balance on any Contract. The Servicer shall comply
with FHA/VA Regulations in servicing any FHA/VA Contracts (and will pay any
required premiums) so that the related insurance of the Federal Housing
Administration or partial guarantee of the Veterans Administration remains in
full force and effect, except for good faith disputes relating to FHA/VA
Regulations that will not cause the termination or reduction of such insurance
or guarantee.
SECTION 5.03 Records.
-------
The Servicer shall, during the period it is servicer hereunder, maintain
such books of account and other records as will enable the Trustee to determine
the status of each Contract.
SECTION 5.04 Inspection; Computer Tape.
-------------------------
a. At all times during the term hereof, the Servicer shall afford the
Trustee and its authorized agents reasonable access during normal business hours
to the Servicer's records, which have not previously been provided to the Trust,
relating to the Contracts and will cause its personnel to assist in any
examination of such records by the Trustee or its authorized agents. The
examination referred to in this Section will be conducted in a manner which does
not unreasonably interfere with the Servicer's normal operations or customer or
employee relations. Without otherwise limiting the scope of the examination the
Trustee may make, the Trustee may, using generally accepted audit procedures,
verify the status of each Contract and review the
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Electronic Ledger and records relating thereto for conformity to Monthly Reports
prepared pursuant to Article VI and compliance with the standards represented to
exist as to each Contract in this Agreement.
b. At all times during the term hereof, the Servicer shall keep available
a copy of the List of Contracts at its principal executive office for inspection
by Certificateholders.
c. On or before the ninth Business Day of each related Due Period, the
Servicer will provide to the Trustee a Computer Tape setting forth a list of all
the outstanding Contracts and the outstanding principal balance of each such
Contract as of the end of the next related Due Period.
SECTION 5.05 Certificate Account.
-------------------
a. On or before the Closing Date, the Servicer shall establish the
Certificate Account on behalf of the Trust, which must be an Eligible Account.
The Certificate Account shall be entitled "U.S. Bank National Association as
Trustee for the benefit of holders of Manufactured Housing Contract Pass-Through
Certificates, Series 2001-1 (Conseco Finance Corp., Servicer)." The Servicer
shall pay into the Certificate Account as promptly as practicable (not later
than the next Business Day) following receipt thereof all payments from Obligors
and Net Liquidation Proceeds, other than late payment penalty fees, extension
fees and assumption fees, which shall be retained by the Servicer as additional
compensation for servicing the Contracts. All amounts paid into the Certificate
Account under this Agreement shall be held in trust for the Trustee and the
Certificateholders until payment of any such amounts is authorized under this
Agreement. Only the Trustee may withdraw funds from the Certificate Account.
b. If the Servicer so directs, the institution maintaining the
Certificate Account shall, in the name of the Trustee in its capacity as such,
invest the amounts in the Certificate Account in Eligible Investments that
mature not later than one Business Day prior to the next succeeding Remittance
Date. Once such funds are invested, such institution shall not change the
investment of such funds. All income and gain from such investments shall be
added to the Certificate Account and distributed on such Remittance Date
pursuant to Section 8.03(a). An amount equal to any net loss on such
investments shall be deposited in the Certificate Account by the Class C
Subsidiary Certificateholder out of its own funds immediately as realized. The
Servicer and the Trustee shall in no way be liable for losses on amounts
invested in accordance with the provisions hereof. Funds in the Certificate
Account not so invested must be insured to the extent permitted by law by the
Federal Deposit Insurance Corporation. "Eligible Investments" are any of the
--------------------
following:
(i) direct obligations of, and obligations fully guaranteed by, the
United States of America, the Federal Home Loan Mortgage Corporation, the
Federal National Mortgage Association, or any agency or instrumentality of
the United States of America the obligations of which are backed by the
full faith and credit of the United States of America and which are
noncallable;
(ii) (A) demand and time deposits in, certificates of deposit of,
bankers' acceptances issued by, or federal funds sold by any depository
institution or trust
5-2
company (including the Trustee or any Affiliate of the Trustee, acting in
its commercial capacity) incorporated under the laws of the United States
of America or any State thereof and subject to supervision and examination
by federal and/or state authorities, so long as, at the time of such
investment or contractual commitment providing for such investment, the
commercial paper or other short-term deposits of such depository
institution or trust company (or, in the case of a depository institution
which is the principal subsidiary of a holding company, the commercial
paper or other short-term debt obligations of such holding company) are
rated at least P-1 by ▇▇▇▇▇'▇, at least A-1 by Standard & Poor's and at
least F-1 by Fitch (if rated by Fitch) and (B) any other demand or time
deposit or certificate of deposit which is fully insured by the Federal
Deposit Insurance Corporation;
(iii) shares of an investment company registered under the Investment
Company Act of 1940, whose shares are registered under the Securities Act
of 1933 and have the highest credit rating then available from ▇▇▇▇▇'▇ and
Fitch (if rated by Fitch) and are rated AAAm or AAAm-G by Standard & Poor's
and whose only investments are in securities described in clauses (i), (ii)
above and (iv) below;
(iv) repurchase obligations with respect to (A) any security
described in clause (i) above or (B) any other security issued or
guaranteed by an agency or instrumentality of the United States of America,
in either case entered into with a depository institution or trust company
(acting as principal) described in clause (ii)(A) above;
(v) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America or
any State thereof which have a credit rating of at least Aa2 from ▇▇▇▇▇'▇,
at least AAA by Standard & Poor's and in one of the two highest rating
categories from Fitch (if rated by Fitch) at the time of such investment;
provided, however, that securities issued by any particular corporation
will not be Eligible Investments to the extent that investment therein will
cause the then outstanding principal amount of securities issued by such
corporation and held as part of the corpus of the Trust to exceed 10% of
amounts held in the Certificate Account;
(vi) commercial paper having a rating of at least A-1+ from Standard
& Poor's and at least P-1 from ▇▇▇▇▇'▇ (if rated by ▇▇▇▇▇'▇) at the time of
such investment or pledge as a security; and
(vii) other obligations or securities that are acceptable to the
Rating Agencies as an Eligible Investment hereunder and will not reduce the
rating assigned to any Class of Certificates by any of the Rating Agencies
below the lower of the then-current rating or the rating assigned to such
Certificates as of the Closing Date by such Rating Agency, as evidenced in
writing;
provided that any such investment must constitute a "cash flow investment"
within the meaning of the REMIC Provisions.
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Notwithstanding the foregoing, securities that represent the right to receive
payments only of interest due on underlying obligations shall not be included as
Eligible Investments, whether or not such securities otherwise fall within (i)
through (vii) above.
The Trustee may trade with itself or an Affiliate in the purchase or sale of
such Eligible Investments.
The Originator, the Servicer and the Seller acknowledge that to the extent
regulations of the Comptroller of the Currency or other applicable regulatory
agency grant the Originator, Seller or Servicer the right to receive brokerage
confirmations of security transactions as they occur, the Originator, the Seller
and the Servicer specifically waive receipt of such confirmations.
c. If at any time the Trustee receives notice (from Standard & Poor's,
▇▇▇▇▇'▇, Fitch or the Servicer or otherwise) that the Certificate Account has
ceased to be an Eligible Account, the Trustee must, as soon as practicable but
in no event later than 5 Business Days of the Trustee's receipt of such notice,
transfer the Certificate Account and all funds and Eligible Investments therein
to an Eligible Account. Following any such transfer, the Trustee must notify
each of the Rating Agencies and the Servicer of the location of the Certificate
Account.
SECTION 5.06 Enforcement.
-----------
a. The Servicer shall, consistent with customary servicing procedures and
the terms of this Agreement, act with respect to the Contracts in such manner as
will maximize the receipt of principal and interest on such Contracts and
Liquidation Proceeds with respect to Liquidated Contracts.
b. The Servicer may ▇▇▇ to enforce or collect upon Contracts, in its own
name, if possible, or as agent for the Trust. If the Servicer elects to
commence a legal proceeding to enforce a Contract, the act of commencement shall
be deemed to be an automatic assignment of the Contract to the Servicer for
purposes of collection only. If, however, in any enforcement suit or legal
proceeding it is held that the Servicer may not enforce a Contract on the ground
that it is not a real party in interest or a holder entitled to enforce the
Contract, the Trustee on behalf of the Trust shall, at the Servicer's expense,
take such steps as the Servicer deems necessary to enforce the Contract,
including bringing suit in its name or the names of the Certificateholders.
c. The Servicer shall exercise any rights of recourse against third
persons that exist with respect to any Contract in accordance with the
Servicer's usual practice. In exercising recourse rights, the Servicer is
authorized on the Trustee's behalf to reassign the Contract or to resell the
related Manufactured Home to the person against whom recourse exists at the
price set forth in the document creating the recourse.
d. So long as Conseco Finance Corp. is the Servicer, the Servicer may
grant to the Obligor on any Contract any rebate, refund or adjustment out of the
Certificate Account that the Servicer in good faith believes is required because
of prepayment in full of the Contract. The Servicer will not permit any
rescission or cancellation of any Contract.
e. So long as Conseco Finance Corp. is the Servicer, the Servicer may,
consistent with its customary servicing procedures and consistent with Section
5.02, grant to the Obligor on
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any Contract an extension of payments due under such Contract, provided that
Obligors may not be solicited for extensions, no such extension may extend
beyond the final scheduled payment date of the Contract with the latest
maturity, as specified in Section 3.04(c), and no more than one extension of
payments under a Contract may be granted in any twelve-month period.
f. The Servicer may enforce any due-on-sale clause in a Contract if such
enforcement is called for under its then current servicing policies for
obligations similar to the Contracts, provided that such enforcement is
permitted by applicable law and will not adversely affect any applicable
insurance policy. If an assumption of a Contract is permitted by the Servicer
upon conveyance of the related Manufactured Home, the Servicer shall use its
best efforts to obtain an assumption agreement in connection therewith and add
such assumption agreement to the related Contract File or Land-and-Home Contract
File.
g. Any provision of this Agreement to the contrary notwithstanding, the
Servicer shall not agree to the modification or waiver of any provision of a
Contract if such modification or waiver would be treated as a taxable exchange
under the REMIC Provisions.
h. In the event that any Contract that was 60 or more days delinquent as
of the Closing Date (each, a "Delinquent Contract") goes into foreclosure, if
acquiring title to the related Mortgaged Property or Manufactured Home would
cause the adjusted basis, for federal income tax purposes, of Delinquent
Contracts that are currently in foreclosure or repossession, along with any
other assets owned by the Subsidiary REMIC other than "qualified mortgages",
qualified "foreclosure property" and "permitted investments" within the meaning
of Section 860G of the Code, to exceed 0.75% of the Pool Scheduled Principal
Balance, the Servicer shall not acquire title to that Mortgaged Property or
Manufactured Home on behalf of the Subsidiary REMIC. Instead, the Servicer
shall dispose of the Mortgaged Property or Manufactured Home for cash in a
foreclosure sale. In addition, if the Servicer determines that the adjusted
basis of Delinquent Contracts that are currently in foreclosure or repossession
on any Remittance Date, along with any other assets owned by the Subsidiary
REMIC, other than "qualified mortgages", "foreclosure property" and "permitted
investments" with the meaning of Section 860G of the Internal Revenue Code,
exceeds 1.0% of the Pool Scheduled Principal Balance after giving effect to
prepayments on the Contracts, then prior to such Remittance Date, the Servicer
shall dispose of sufficient Mortgaged Properties and Manufactured Homes securing
Delinquent Contracts and acquired upon foreclosure repossession, for cash, so
that the adjusted basis of Delinquent Contracts that are currently in
foreclosure or repossession, along with any other assets owned by the Subsidiary
REMIC, other than "qualified mortgages", "foreclosure property" and "permitted
investments" within the meaning of Section 860G of the Code, will be less than
1.0% of the Pool Scheduled Principal Balance. In either event, the Servicer may
acquire, for its own account and not on behalf of the Subsidiary REMIC, the
Mortgaged Property or Manufactured Home at the foreclosure sale for an amount
not less than the greater of: (i) the highest amount bid by any other person at
the foreclosure sale, or (ii) the estimated fair value of the Mortgaged Property
or Manufactured Home, as determined by the Servicer in good faith.
SECTION 5.07 Trustee to Cooperate.
--------------------
a. Upon payment in full on any Contract, the Servicer will notify the
Trustee and Conseco Finance Corp. (if Conseco Finance Corp. is not the Servicer)
on the next succeeding
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Remittance Date by certification of a Servicing Officer (which certification
shall include a statement to the effect that all amounts received in connection
with such payments which are required to be deposited in the Certificate Account
pursuant to Section 5.05 have been so deposited). The Servicer is authorized to
execute an instrument in satisfaction of such Contract and to do such other acts
and execute such other documents as the Servicer deems necessary to discharge
the Obligor thereunder and eliminate the lien on the related real estate. The
Servicer shall determine when a Contract has been paid in full; to the extent
that insufficient payments are received on a Contract credited by the Servicer
as prepaid or paid in full and satisfied, the shortfall shall be paid by the
Servicer out of its own funds.
b. From time to time as appropriate for servicing and foreclosure in
connection with any Land-and-Home Contract, the Trustee shall, upon written
request of a Servicing Officer and delivery to the Trustee of a receipt signed
by such Servicing Officer, cause the original Land-and-Home Contract and the
related Land-and-Home Contract File to be released to the Servicer and shall
execute such documents as the Servicer shall deem necessary to the prosecution
of any such proceedings. The Trustee shall stamp the face of each such Land-
and-Home Contract to be released to the Servicer with a notation that the Land-
and-Home Contract has been assigned to the Trustee. Upon request of a Servicing
Officer, the Trustee shall perform such other acts as reasonably requested by
the Servicer and otherwise cooperate with the Servicer in enforcement of the
Certificateholders' and Class C Certificateholders' rights and remedies with
respect to Contracts.
c. The Servicer's receipt of a Land-and-Home Contract and/or Land-and-
Home Contract File shall obligate the Servicer to return the original Land-and-
Home Contract and the related Land-and-Home Contract File to the Trustee when
its need by the Servicer has ceased unless the Contract shall be liquidated or
repurchased or replaced as described in Section 3.06.
SECTION 5.08 Costs and Expenses.
------------------
All costs and expenses incurred by the Servicer in carrying out its duties
hereunder, including all fees and expenses incurred in connection with the
enforcement of Contracts (including enforcement of defaulted Contracts and
repossessions of Manufactured Homes securing such Contracts) shall be paid by
the Servicer and the Servicer shall not be entitled to reimbursement hereunder,
except that the Servicer shall be reimbursed out of the Liquidation Proceeds of
a Liquidated Contract for Liquidation Expenses incurred by it. The Servicer
shall not incur such Liquidation Expenses unless it determines in its good faith
business judgment that incurring such expenses will increase the Net Liquidation
Proceeds on the related Contract.
SECTION 5.09 Maintenance of Insurance.
------------------------
a. Except as otherwise provided in subsection (b) of this Section 5.09,
the Servicer shall cause to be maintained with respect to each Contract one or
more Hazard Insurance Policies which provide, at a minimum, the same coverage as
a standard form fire and extended coverage insurance policy that is customary
for manufactured housing, issued by a company authorized to issue such policies
in the state in which the related Manufactured Home is located and in an amount
which is not less than the maximum insurable value of such Manufactured Home or
the principal balance due from the Obligor on the related Contract, whichever is
less; provided,
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however, that the amount of coverage provided by each Hazard Insurance Policy
shall be sufficient to avoid the application of any co-insurance clause
contained therein; and provided, further, that such Hazard Insurance Policies
may provide for customary deductible amounts. With respect to: (a) a
Manufactured Home securing an FHA/VA Contract, if such Manufactured Home's
location was, at the time of origination of the related FHA/VA Contract, within
a federally designated special flood hazard area, the Servicer shall also cause
such flood insurance to be maintained, which coverage shall be at least equal to
the minimum amount specified in the preceding sentence or such lesser amount as
may be available under the federal flood insurance program; and (b) any Contract
that is not an FHA/VA Contract, the Originator shall obtain (i) a statement from
the Obligor's insurance agent that the Manufactured Home was, at the time of
origination of the Contract, not in a federally designated special flood hazard
area, or (ii) evidence that, at the time of origination, flood insurance was in
effect, which coverage was at least equal to the minimum amount specified in the
preceding sentence or such lesser amount as may be available under the federal
flood insurance program. Each Hazard Insurance Policy caused to be maintained by
the Servicer shall contain a standard loss payee clause in favor of the Servicer
and its successors and assigns. If any Obligor is in default in the payment of
premiums on its Hazard Insurance Policy or Policies, the Servicer shall pay such
premiums out of its own funds and may separately add such premium to the
Obligor's obligation as provided by the Contract, but shall not add such premium
to the remaining principal balance of the Contract.
b. The Servicer may, in lieu of causing individual Hazard Insurance
Policies to be maintained with respect to each Manufactured Home pursuant to
subsection (a) of this Section 5.09, and shall, to the extent that the related
Contract does not require the Obligor to maintain a Hazard Insurance Policy with
respect to the related Manufactured Home, maintain one or more blanket insurance
policies covering losses on the creditor's interest in the Contracts resulting
from the absence or insufficiency of individual Hazard Insurance Policies. Any
such blanket policy shall be substantially in the form and in the amount carried
by the Servicer as of the date of this Agreement. The Servicer shall pay the
premium for such policy on the basis described therein and shall deposit into
the Certificate Account from its own funds any deductible amount with respect to
claims under such blanket insurance policy relating to the Contracts. The
Servicer shall not, however, be required to deposit any deductible amount with
respect to claims under individual Hazard Insurance Policies maintained pursuant
to subsection (a) of this Section. If the insurer under such blanket insurance
policy shall cease to be acceptable to the Servicer, the Servicer shall exercise
its best reasonable efforts to obtain from another insurer a replacement policy
comparable to such policy.
c. With respect to each Manufactured Home that has been repossessed in
connection with a defaulted Contract, the Servicer shall either (i) maintain one
or more Hazard Insurance Policies thereon or (ii) self-insure such Manufactured
Homes and deposit into the Certificate Account from its own funds any losses
caused by damage to such Manufactured Home that would have been covered by a
Hazard Insurance Policy.
d. The Servicer shall keep in force throughout the term of this Agreement
(i) a policy or policies of insurance covering errors and omissions for failure
to maintain insurance as required by this Agreement and (ii) a fidelity bond.
Such policy or policies and such fidelity bond shall be in such form and amount
as is generally customary among Persons which service a portfolio of
manufactured housing installment sales contracts and installment loan agreements
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having an aggregate principal amount of $100,000,000 or more and which are
generally regarded as servicers acceptable to institutional investors.
SECTION 5.10 Repossession.
------------
Notwithstanding the standard of care specified in Section 5.02, the
Servicer shall commence procedures for the repossession of any Manufactured Home
or the foreclosure upon any Mortgaged Property or take such other steps that in
the Servicer's reasonable judgment will maximize the receipt of principal and
interest or Net Liquidation Proceeds with respect to the Contract secured by
such Manufactured Home or Mortgaged Property (which may include retitling or
filing a recorded assignment of the Mortgage) subject to the requirements of the
applicable state and federal law, no later than five Business Days after the
time when such Contract becomes a Defaulted Contract; provided that if the
Servicer has actual knowledge that a Mortgaged Property is affected by hazardous
waste, then the Servicer shall not cause the Trust to acquire title to such
Mortgaged Property in a foreclosure or similar proceeding. For purposes of the
proviso in the preceding sentence, the Servicer shall not be deemed to have
actual knowledge that a Mortgaged Property is affected by hazardous waste unless
it shall have received written notice that hazardous waste is present on such
property and such written notice has been made a part of the Land-and-Home
Contract File with respect to the related Contract. In connection with such
foreclosure or other conversion, the Servicer shall follow such practices and
procedures as it shall deem necessary or advisable and as shall be consistent
with Section 5.02. In the event that title to any Mortgaged Property is
acquired in foreclosure or by deed in lieu of foreclosure, the deed or
certificate of sale shall be issued to the Trustee, as Trustee, or, at its
election, to its nominee on behalf of the Trustee, as Trustee.
SECTION 5.11 Commingling of Funds.
--------------------
So long as Conseco Finance Corp. is the Servicer, any collections in
respect of Contracts collected by Conseco Finance Corp. shall, prior to the
deposit thereof in the Certificate Account, be held in bank accounts entitled
substantially as follows: "[name of depository], as agent for U.S. Bank
National Association as Trustee, other trustees, and Conseco Finance Corp., as
their interests may appear."
SECTION 5.12 Retitling; Security Interests.
-----------------------------
a. If, at any time, a Service Transfer has occurred and Conseco Finance
Corp. is no longer the Servicer and the new Servicer is unable to foreclose upon
a Manufactured Home because the title document for such Manufactured Home does
not show such Servicer or the Trustee as the holder of the first priority
security interest in the Manufactured Home, such Servicer shall take all
necessary steps to apply for a replacement title document showing it or the
Trustee as the secured party.
b. In order to facilitate the Servicer's actions, as described in
subsection (a) of this section, Conseco Finance Corp. will provide the Servicer
with any necessary power of attorney permitting it to retitle the Manufactured
Home.
c. If the Servicer is still unable to retitle the Manufactured Home,
Conseco Finance Corp. will take all actions necessary to act with the Servicer
to foreclose upon the Manufactured
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Home, including, as appropriate, the filing of any UCC-1 or UCC-2 financing
statements necessary to perfect the security interest in any Manufactured Home
that constitutes a fixture under the laws of the jurisdiction in which it is
located and all actions necessary to perfect the security interest in any
Manufactured Home that is considered or classified as part of the real estate on
which it is located under the laws of the jurisdiction in which it is located.
d. The Originator shall (i) deliver to the Trustee an Opinion of Counsel
to the effect that assignment and recordation of the Mortgages, securing Land-
and-Home Contracts relating to real estate located in any state other than those
states specified in such Opinion of Counsel (the "recordation states"), is not
necessary to effect the assignment to the Trustee of the Originator's lien on
the real property securing such Land-and-Home Contracts, and (ii) file in the
appropriate recording offices within 60 days after the Closing Date (or within
30 days after receipt of the recorded Mortgage, if later) the assignments to the
Trustee on behalf of the Trust of the Mortgages securing all Land-and-Home
Contracts secured by Mortgages relating to real estate located in the
recordation states.
Covenants, Representations and Warranties of Servicer. By its execution and
-----------------------------------------------------
delivery of this Agreement, the Servicer makes the following representations,
warranties and covenants on which the Trust relies in accepting the Contracts
and issuing the Certificates.
a. Organization and Good Standing. The Servicer is a corporation duly
------------------------------
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and has the corporate power to own its assets
and to transact the business in which it is currently engaged. The Servicer is
duly qualified to do business as a foreign corporation and is in good standing
in each jurisdiction in which the character of the business transacted by it or
properties owned or leased by it requires such qualification and in which the
failure so to qualify would have a material adverse effect on the business,
properties, assets, or condition (financial or other) of the Servicer, or its
ability to carry out its obligations hereunder.
b. Authorization; Binding Obligations. The Servicer has the power and
----------------------------------
authority to make, execute, deliver and perform this Agreement and all of the
transactions contemplated under this Agreement and has taken all necessary
corporate action to authorize the execution, delivery and performance of this
Agreement. When executed and delivered, this Agreement will constitute the
legal, valid and binding obligation of the Servicer enforceable in accordance
with its terms, except as enforcement of such terms may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally and by the availability of equitable remedies.
c. No Consent Required. The Servicer is not required to obtain the
-------------------
consent of any other party or any consent, license, approval or authorization
from, or registration or declaration with, any governmental authority, bureau or
agency in connection with the execution, delivery, performance, validity or
enforceability of this Agreement, except for such consents, licenses, approvals
and authorizations as have been obtained.
d. No Violations. The execution, delivery and performance by the
-------------
Servicer of this Agreement and the fulfillment of its terms will not violate any
provision of any existing law or regulation or any order or decree of any court
or the related Certificate of Incorporation or
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Bylaws of the Servicer, or constitute a material breach of any mortgage,
indenture, contract or other agreement to which the Servicer is a party or by
which the Servicer may be bound.
e. Litigation. No litigation or administrative proceeding of or before
----------
any court, tribunal or governmental body is currently pending, or to the
knowledge of the Servicer threatened, against the Servicer or any of its
properties or with respect to this Agreement or the Certificates which, if
adversely determined, would in the opinion of the Servicer have a material
adverse effect on the transactions contemplated by this Agreement.
f. Chief Executive Office. The chief executive office of the Servicer is
----------------------
at 1100 Landmark Towers, ▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
g. No Default. The Servicer is not in default with respect to any order
----------
or decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency, which default would materially and adversely
affect its condition (financial or other) or operations or its properties or the
consequences of which would materially and adversely affect its performance
hereunder. The Servicer is not in default under any agreement involving
financial obligations or on any outstanding obligation which would materially
adversely impact its financial condition or operations or legal documents
associated with the transaction contemplated by this Agreement.
h. No Impairment. The Servicer shall do nothing to impair the rights of
-------------
the Trust, or the Certificateholders in the Certificates.
i. No Amendments. The Servicer shall not extend or otherwise amend the
-------------
terms of any Contract, except in accordance with Section 5.06.
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ARTICLE VI
----------
REPORTS AND TAX MATTERS
-----------------------
SECTION 6.01 Monthly Reports.
---------------
a. No later than 1:00 p.m. on each Determination Date, the Servicer shall
deliver to the Trustee, the Paying Agent, the Originator (if the Originator is
not the Servicer) and the Rating Agencies a "Monthly Report," substantially in
--------------
the form of Exhibit N hereto.
b. If the applicable Monthly Report indicates that there is a Class M-1
Interest Deficiency Amount, a Class M-2 Interest Deficiency Amount and/or a
Class B-1 Interest Deficiency Amount, the Servicer shall promptly notify the
Trustee, by telephone, of the aggregate amount of such Class M-1 Interest
Deficiency Amount, Class M-2 Interest Deficiency Amount and Class B-1 Interest
Deficiency Amount. On the day one Business Day prior to the related Remittance
Date, the Trustee shall determine the total amount of funds in the Certificate
Account available to pay such deficiency in accordance with Section 8.03(d) and
shall promptly notify the Servicer of such amount. If the total amount of funds
in the Certificate Account is not sufficient to pay the deficiency, the Trustee
shall promptly notify the Servicer, and shall reflect such deficiency in the
reports delivered to Certificateholders pursuant to Section 6.05.
SECTION 6.02 Certificate of Servicing Officer.
--------------------------------
Each Monthly Report pursuant to Section 6.01 shall be accompanied by a
certificate of a Servicing Officer substantially in the form of Exhibit I,
certifying the accuracy of the Monthly Report and that no Event of Termination
or event that with notice or lapse of time or both would become an Event of
Termination has occurred, or if such event has occurred and is continuing,
specifying the event and its status.
SECTION 6.03 Other Data.
----------
In addition, the Originator and (if different from the Originator) the
Servicer shall, on request of the Trustee, Standard & Poor's, ▇▇▇▇▇'▇, Fitch or
a Certificateholder, furnish the Trustee and/or Standard & Poor's, ▇▇▇▇▇'▇,
Fitch or a Certificateholder such underlying data as may be reasonably
requested.
SECTION 6.04 Annual Report of Accountants.
----------------------------
On or before May 1 of each year, commencing May 1, 2002, the Servicer at
its expense shall cause a firm of independent public accountants which is a
member of the American Institute of Certified Public Accountants to issue to the
Servicer a report that such firm has examined selected documents, records and
management's assertions relating to loans serviced by the Servicer and stating
that, on the basis of such examination, such servicing has been conducted in
compliance with the minimum servicing standards identified in the Mortgage
Bankers Association of America's Uniform Single Attestation Program for Mortgage
Bankers, or any successor uniform program, except for such significant
exceptions or errors in records that, in the opinion of such firm, generally
accepted attestation standards requires it to report.
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SECTION 6.05 Statements to Certificateholders.
--------------------------------
a. The Servicer shall prepare and furnish to the Trustee the statements
specified below relating to the Class A Certificates, Class M-1 Certificates,
Class M-2 Certificates, Class B-1 Certificates, Class B-2 Certificates and Class
B-3I Certificates on or before the third Business Day next preceding each
Remittance Date. The Trustee and the Servicer shall inform any
Certificateholder or any Underwriter inquiring by telephone of the information
contained in the most recent Monthly Report.
b. Concurrently with each distribution charged to the Certificate
Account the Trustee, so long as it has received the Monthly Report from the
Servicer, shall forward or cause to be forwarded by mail to each Holder of a
Class A Certificate and (if the Originator is not the Servicer) the Originator a
statement setting forth the following:
(i) the amount of such distribution to Holders of each Class of Class A
Certificates allocable to interest, separately identifying any
Unpaid Class A Interest Shortfall included in such distribution and
any remaining Unpaid Class A Interest Shortfall after giving effect
to such distribution;
(ii) the amount of such distribution to Holders of each Class of Class A
Certificates allocable to principal, separately identifying the
aggregate amount of any Principal Prepayments included therein, and
any remaining Unpaid Class A Principal Shortfall after giving effect
to such distribution;
(iii) the Class Principal Balance for each Class of Class A Certificates
and the Class A-IO Notional Principal Amount, after giving effect to
the distribution of principal on such Remittance Date;
(iv) the Class A Percentage for such Remittance Date and the following
Remittance Date;
(v) the Pool Scheduled Principal Balance of the Contracts for such
Remittance Date;
(vi) the Pool Factor;
(vii) the number and aggregate principal balances of Contracts delinquent
(a) 30-59 days and (b) 60 or more days;
(viii) the number of Manufactured Homes that were repossessed during the
month ending immediately prior to such Remittance Date, the number
of repossessed Manufactured Homes that remain in inventory as of the
last day of the related Due Period and repossessed Manufactured
Homes purchased by the Originator or a subsidiary of the Originator
from the Trust (during the related Due Period and cumulatively) by
number of Contracts, aggregate Scheduled Principal Balance of such
Contracts and aggregate purchase price;
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(ix) number of Contracts and aggregate Scheduled Principal Balance of
Contracts extended or otherwise amended during the Due Period
preceding current Remittance Date.
(x) the Class M-1 Distribution Test (as set forth in Exhibit N hereto);
(xi) the Class M-2 Distribution Test (as set forth in Exhibit N hereto);
(xii) the Class B Distribution Test (as set forth in Exhibit N hereto);
(xiii) the Weighted Average Contract Rate and Adjusted Weighted Average
Contract Rate;
(xiv) the Class M-1 Interest Deficiency Amount, if any, for such
Remittance Date;
(xv) the Class M-2 Interest Deficiency Amount, if any, for such
Remittance Date;
(xvi) the Class B-1 Interest Deficiency Amount, if any, for such
Remittance Date;
(xvii) the Overcollateralization Amount, if any, for such Remittance Date;
and
(xviii) the Additional Principal Distribution Amount, if any, to be
distributed on such Remittance Date pursuant to Section
8.03(a)(12).
In the case of information furnished pursuant to clauses (i) through (iii)
above, the amounts shall be expressed as a dollar amount per Class A Certificate
with a $1,000 denomination.
Within a reasonable period of time after the end of each calendar year, the
Trustee shall furnish or cause to be furnished to each Person who at any time
during the calendar year was the Holder of a Class A Certificate a statement
containing the information with respect to interest accrued and principal paid
on its Certificates during such calendar year. Such obligation of the Trustee
shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Trustee pursuant to any
requirements of the Code as from time to time in force.
c. On each Remittance Date, the Trustee shall forward or cause to be
forwarded by mail to each Holder of a Class M-1 Certificate a copy of the
Monthly Report forwarded to the Holders of Class A Certificates on such
Remittance Date. The Servicer shall also furnish to the Trustee, which shall
forward such report to the Class M-1 Certificateholders as part of the Monthly
Report, the following information:
(i) the amount of such distribution to Holders of Class M-1
Certificates allocable to interest, separately identifying any
Unpaid Class M-1 Interest Shortfall included in such distribution,
any remaining Unpaid Class M-1 Interest Shortfall after giving
effect to such distribution, any Class M-1 Liquidation Loss
Interest Amount included in such distribution and any remaining
unpaid Class M-1 Liquidation Loss Interest Shortfall after giving
effect to such distribution;
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(ii) the amount of such distribution to Holders of Class M-1 Certificates
allocable to principal, separately identifying the aggregate amount
of any Principal Prepayments included therein and any remaining
Unpaid Class M-1 Principal Shortfall after giving effect to such
distribution;
(iii) the Class M-1 Principal Balance and the Class M-1 Adjusted Principal
Balance (if different) after giving effect to the distribution of
principal on such Remittance Date;
(iv) the Class M-1 Percentage for such Remittance Date and the following
Remittance Date; and
(v) the information described above in Section 6.05(b)(v) through
(xviii).
In the case of the information in clauses (i) through (iii) above, the
amounts shall be expressed as a dollar amount per Class M-1 Certificate with a
$1,000 denomination.
Within a reasonable period of time after the end of each calendar year, the
Trustee shall furnish or cause to be furnished to each Person who at any time
during the calendar year was the Holder of a Class M-1 Certificate a statement
containing the applicable distribution information provided pursuant to this
Section aggregated for such calendar year or applicable portion thereof during
which such Person was the Holder of a Class M-1 Certificate. Such obligation of
the Trustee shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Trustee pursuant
to any requirements of the Code as from time to time enforced.
d. On each Remittance Date, the Trustee shall forward or cause to be
forwarded by mail to each Holder of a Class M-2 Certificate a copy of the
Monthly Report forwarded to the Holders of Class A Certificates and Class M-1
Certificates on such Remittance Date. The Servicer shall also furnish to the
Trustee, which shall forward such report to the Class M-2 Certificateholders as
part of the Monthly Report, the following information:
(i) the amount of such distribution to Holders of Class M-2 Certificates
allocable to interest, separately identifying any Unpaid Class M-2
Interest Shortfall included in such distribution, any remaining
Unpaid Class M-2 Interest Shortfall after giving effect to such
distribution, any Class M-2 Liquidation Loss Interest Amount
included in such distribution and any remaining unpaid Class M-2
Liquidation Loss Interest Shortfall after giving effect to such
distribution;
(ii) the amount of such distribution to Holders of Class M-2 Certificates
allocable to principal, separately identifying the aggregate amount
of any Principal Prepayments included therein and any remaining
Unpaid Class M-2 Principal Shortfall after giving effect to such
distribution;
(iii) the Class M-2 Principal Balance and the Class M-2 Adjusted Principal
Balance (if different) after giving effect to the distribution of
principal on such Remittance Date;
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(iv) the Class M-2 Percentage for such Remittance Date and the following
Remittance Date; and
(v) the information described above in Section 6.05(b)(v) through
(xviii).
In the case of the information in clauses (i) through (iii) above, the
amounts shall be expressed as a dollar amount per Class M-2 Certificate with a
$1,000 denomination.
Within a reasonable period of time after the end of each calendar year, the
Trustee shall furnish or cause to be furnished to each Person who at any time
during the calendar year was the Holder of a Class M-2 Certificate a statement
containing the applicable distribution information provided pursuant to this
Section aggregated for such calendar year or applicable portion thereof during
which such Person was the Holder of a Class M-2 Certificate. Such obligation of
the Trustee shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Trustee pursuant
to any requirements of the Code as from time to time enforced.
e. On each Remittance Date, the Trustee shall forward or cause to be
forwarded by mail to each Holder of a Class B-1 Certificate a copy of the
Monthly Report forwarded to the Holders of Class A, Class M-1 and Class M-2
Certificates on such Remittance Date. The Servicer shall also furnish to the
Trustee, which shall forward such report to the Class B-1 Certificateholders as
part of the Monthly Report, the following information:
(i) the amount of such distribution to Holders of Class B-1 Certificates
allocable to interest, separately identifying any Unpaid Class B-1
Interest Shortfall included in such distribution, any remaining
Unpaid Class B-1 Interest Shortfall after giving effect to such
distribution, any Class B-1 Liquidation Loss Interest Amount
included in such distribution and any remaining Unpaid Class B-1
Liquidation Loss Interest Shortfall after giving effect to such
distribution;
(ii) the amount of such distribution to Holders of Class B-1 Certificates
allocable to principal, separately identifying the aggregate amount
of any Principal Prepayments included therein, and any remaining
Unpaid Class B-1 Principal Shortfall after giving effect to such
distribution;
(iii) the Class B-1 Principal Balance and the Class B-1 Adjusted Principal
Balance (if different) after giving effect to the distribution of
principal on such Remittance Date;
(iv) the Class B Percentage for such Remittance Date and the following
Remittance Date; and
(v) the information described above in Section 6.05(b)(v) through
(xviii).
In the case of the information in clauses (i) through (iii) above, the
amounts shall be expressed as a dollar amount per Class B-1 Certificate with a
$1,000 denomination.
6-5
Within a reasonable period of time after the end of each calendar year, the
Trustee shall furnish or cause to be furnished to each Person who at any time
during the calendar year was the Holder of a Class B-1 Certificate a statement
containing the applicable distribution information provided pursuant to this
Section aggregated for such calendar year or applicable portion thereof during
which such Person was the Holder of a Class B-1 Certificate. Such obligation of
the Trustee shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Trustee pursuant
to any requirements of the Code as from time to time enforced.
f. On each Remittance Date, the Trustee shall forward or cause to be
forwarded by mail to each Holder of a Class B-2 Certificate a copy of the
Monthly Report forwarded to the Holders of Class A, Class M-1, Class M-2 and
Class B-1 Certificates on such Remittance Date. The Servicer shall also furnish
to the Trustee, which shall forward such report to the Class B-2
Certificateholders as part of the Monthly Report, the following information:
(i) the amount of such distribution to Holders of Class B-2 Certificates
allocable to interest, separately identifying any Unpaid Class B-2
Interest Shortfall included in such distribution and any remaining
Unpaid Class B-2 Interest Shortfall after giving effect to such
distribution;
(ii) the amount of such distribution to Holders of Class B-2 Certificates
allocable to principal, separately identifying the aggregate amount
of any Principal Prepayments included therein, and any Unpaid Class
B-2 Principal Shortfall after giving effect to such distribution;
(iii) the amount, if any, by which the Class B-2 Formula Distribution
Amount for such Remittance Date exceeds the Remaining Amount
Available for such Remittance Date;
(iv) the Class B-2 Principal Balance and Class B-2 Adjusted Principal
Balance, if different, after giving effect to the distribution of
principal on such Remittance Date;
(v) the Class B Percentage for such Remittance Date and the following
Remittance Date;
(vi) the information described above in Section 6.05(b)(v) through
(xviii);
(vii) the Class B-2 Liquidation Loss Amount, if any, for such Remittance
Date; and
(viii) the Weighted Average Contract Rate of all outstanding Contracts.
In the case of the information in clauses (i) through (iv) above, the
amounts shall be expressed as a dollar amount per Class B-2 Certificate with a
$1,000 denomination.
Within a reasonable period of time after the end of each calendar year, the
Trustee shall furnish or cause to be furnished to each Person who at any time
during the calendar year was the Holder of a Class B-2 Certificate a statement
containing the applicable distribution information
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provided pursuant to this Section aggregated for such calendar year or
applicable portion thereof during which such Person was the Holder of a Class B-
2 Certificate. Such obligation of the Trustee shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Trustee pursuant to any requirements of the Code as from time to
time enforced.
g. On each Remittance Date, the Trustee shall forward or cause to be
forwarded by mail to each Holder of a Class B-3I Certificate a copy of the
Monthly Report forwarded to the Holders of Class A, Class M-1, Class M-2, Class
B-1 and Class B-2 Certificates on such Remittance Date. The Servicer shall also
furnish to the Trustee, which shall forward such report to the Class B-3I
Certificateholders as part of the Monthly Report, the following information:
(i) the Class B-3I Distribution Amount for such Remittance Date; and
(ii) the amount distributed to the Class B-3I Certificateholder on such
Remittance Date.
h. Copies of all reports provided to the Trustee for the
Certificateholders shall also be provided to Standard & Poor's, ▇▇▇▇▇'▇ and
Fitch and to the Class C Certificateholders. In addition, Certificate Owners
may receive copies of any reports provided to the Trustee for the
Certificateholders, upon written request together with a certification that they
are Certificate Owners and payment of reproduction and postage expenses
associated with the distribution of such reports, from the Trustee at the
Corporate Trust Office.
SECTION 6.06 Payment of Taxes.
----------------
The Servicer shall be responsible for and agrees to prepare, make and file
all federal, state, local or other tax returns, information statements and other
returns and documents of every kind and nature whatsoever required to be made or
filed by or on behalf of the Subsidiary REMIC, Intermediate REMIC or Master
REMIC pursuant to the Code and other applicable tax laws and regulations. Each
such return, statement and document shall, to the extent required by the Code or
other applicable law and at the request of the Servicer, be signed on behalf of
the Subsidiary REMIC, Intermediate REMIC or Master REMIC by the Trustee. The
Trustee shall have no responsibility whatsoever for the accuracy or completeness
of any such return, statement or document. The Servicer agrees to indemnify the
Trustee and hold it harmless for, from, against and in respect to any and all
liability, loss, damage and expense which may be incurred by the Trustee based
upon or as a result of the Trustee's execution of any and all such tax returns,
statements and documents. The Servicer, if and for so long as it is a Class C
Certificateholder, shall be designated the "tax matters person" on behalf of the
Subsidiary REMIC, Intermediate REMIC and Master REMIC, respectively, in the same
manner as a partnership may designate a "tax matters partner," as such term is
defined in Section 6231(a)(7) of the Code. To the extent permitted by the REMIC
Provisions, any subsequent holder of a Class C Certificate, by acceptance
thereof, irrevocably designates and appoints the Servicer as its agent to
perform the responsibilities of the "tax matters person" on behalf of the
Subsidiary REMIC, Intermediate REMIC and Master REMIC, respectively, if, and
during such time as, the Servicer is not the holder of a Class C Certificate.
The Servicer may, at its expense, retain such outside assistance as it deems
necessary in the performance of its obligations under this paragraph.
6-7
Each of the Holders of the Certificates, by acceptance thereof, agrees to
file tax returns consistent with and in accordance with any elections, decisions
or other reports made or filed with regard to federal, state or local taxes on
behalf of the Subsidiary REMIC, Intermediate REMIC or Master REMIC. The
Originator, as agent for the tax matters person, shall represent the Subsidiary
REMIC, Intermediate REMIC or Master REMIC in connection with all examinations of
the affairs of the Subsidiary REMIC, Intermediate REMIC or Master REMIC by tax
authorities, including resulting administrative and judicial proceedings. Each
of the holders of the Certificates, by acceptance thereof, agrees to cooperate
with the Originator in such matters and to do or refrain from doing any or all
things reasonably required by the Originator to conduct such proceedings,
provided that no such action shall be required by the Originator of any
Certificateholder that would entail unnecessary or unreasonable expenses for
such Certificateholder in the performance of such action.
The Class C Subsidiary Certificateholder, Class C Intermediate
Certificateholder and Class C Master Certificateholder shall pay, on behalf of
the Subsidiary REMIC, Intermediate REMIC or Master REMIC, respectively, any
foreign, federal, state or local income, property, excise, sales, receipts or
any other similar or related taxes or charges which may be imposed upon the
Subsidiary REMIC, Intermediate REMIC or Master REMIC as a REMIC or otherwise and
shall, to the extent provided in Section 10.06, be entitled to be reimbursed out
of the Certificate Account or, if such tax or charge results from a failure by
the Trustee, the Originator or any Servicer to comply with the provisions of
Section 2.04 or 3.07, the Trustee, the Originator or such Servicer, as the case
may be, shall indemnify the Class C Certificateholders for the payment of any
such tax or charge. The Trustee shall be entitled to withhold from amounts
otherwise distributable to the Class C Certificateholders any taxes or charges
payable by the Class C Certificateholders hereunder.
In the event a Class C Certificate is transferred to a "disqualified
organization," within the meaning of Section 860E(e)(5) of the Code, pursuant to
Section 860D(a)(6)(B) of the Code the Seller shall provide to the Internal
Revenue Service and the persons specified in Sections 860E(e)(3) and (6) of the
Code all information necessary for the application of Section 860E(e) and any
other applicable provision of the Code with respect to the transfer of such
Class C Certificate to such a disqualified organization including, without
limitation, a computation showing the present value of the total anticipated
excess inclusions with respect to such Class C Certificate for periods after the
transfer as defined in the REMIC Provisions. In addition, to the extent
required by the REMIC Provisions, the Seller shall, upon the written request of
persons designated in Section 860E(e)(3) of the Code, furnish to such requesting
party and the Internal Revenue Service information sufficient to compute the
present value of anticipated excess inclusions within 60 days of the receipt of
such written request.
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ARTICLE VII
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SERVICE TRANSFER
----------------
SECTION 7.01 Event of Termination.
--------------------
"Event of Termination" means the occurrence of any of the following:
--------------------
a. Any failure by the Servicer to make any deposit into an account
required to be made hereunder and the continuance of such failure for a period
of five Business Days after the Servicer has become aware, or should have become
aware, that such deposit was required;
b. Failure on the Servicer's part to observe or perform in any material
respect any covenant or agreement in this Agreement (other than a covenant or
agreement which is elsewhere in this Section specifically dealt with) which
continues unremedied for 30 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to the
Servicer by the Trustee or to the Servicer and the Trustee by Holders of Class A
Certificates, Class M-1 Certificates, Class M-2 Certificates and Class B
Certificates evidencing, as to any such Class, Percentage Interests aggregating
not less than 25%;
c. Any assignment by the Servicer of its duties hereunder except as
specifically permitted hereunder, or any attempt to make such an assignment;
d. A court or other governmental authority having jurisdiction in the
premises shall have entered a decree or order for relief in respect of the
Servicer in an involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar official) of
the Servicer, as the case may be, or for any substantial liquidation of its
affairs, and such order remains undischarged and unstayed for at least 60 days;
e. The Servicer shall have commenced a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or shall have consented to the entry of an order for relief in an
involuntary case under any such law, or shall have consented to the appointment
of or taking possession by a receiver, liquidator, assignee, trustee, custodian
or sequestrator (or other similar official) of the Servicer or for any
substantial part of its property, or shall have made any general assignment for
the benefit of its creditors, or shall have failed to, or admitted in writing
its inability to, pay its debts as they become due, or shall have taken any
corporate action in furtherance of the foregoing; or
f. The failure of the Servicer to be an Eligible Servicer.
SECTION 7.02 Transfer.
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If an Event of Termination has occurred and is continuing, either the
Trustee or Certificateholders with aggregate Percentage Interests representing
25% or more of the Trust, by notice in writing to the Servicer (and to the
Trustee if given by the Certificateholders) may terminate all (but not less than
all) of the Servicer's management, administrative, servicing and collection
functions (such termination being herein called a "Service Transfer"). On
receipt of
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such notice (or, if later, on a date designated therein), or upon resignation of
the Servicer in accordance with Section 12.01, all authority and power of the
Servicer under this Agreement, whether with respect to the Contracts, the
Contract Files, the Land-and-Home Contract Files or otherwise (except with
respect to the Certificate Account, the transfer of which shall be governed by
Section 7.06), shall pass to and be vested in the Trustee pursuant to and under
this Section 7.02; and, without limitation, the Trustee is authorized and
empowered to execute and deliver on behalf of the Servicer, as attorney-in-fact
or otherwise, any and all documents and other instruments (including, without
limitation, documents required to make the Trustee or a successor servicer the
sole lienholder or legal title holder of record of each Manufactured Home) and
to do any and all acts or things necessary or appropriate to effect the purposes
of such notice of termination. Each of the Originator and the Servicer agrees to
cooperate with the Trustee in effecting the termination of the responsibilities
and rights of the Servicer hereunder, including, without limitation, the
transfer to the Trustee for administration by it of all cash amounts which shall
at the time be held by the Servicer for deposit, or have been deposited by the
Servicer, in the Certificate Account, or for its own account in connection with
its services hereafter or thereafter received with respect to the Contracts and
the execution of any documents required to make the Trustee or a successor
servicer the sole lienholder or legal title holder of record in respect of each
Manufactured Home. The Servicer shall be entitled to receive any other amounts
which are payable to the Servicer under the Agreement, at the time of the
termination of its activities as Servicer. The Servicer shall transfer to the
new servicer (i) the Servicer's records relating to the Contracts in such
electronic form as the new servicer may reasonably request and (ii) any
Contracts, Contract Files and Land-and-Home Contract Files in the Servicer's
possession.
SECTION 7.03 Trustee to Act; Appointment of Successor.
----------------------------------------
On and after the time the Servicer receives a notice of termination
pursuant to Section 7.02 or the resignation of the Servicer in accordance with
Section 12.01, the Trustee shall be the successor in all respects to the
Servicer in its capacity as servicer under this Agreement and the transactions
set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Servicer
by the terms and provisions hereof and the Servicer shall be relieved of such
responsibilities, duties and liabilities arising after such Service Transfer;
provided, however, that (i) the Trustee will not assume any obligations of the
Originator pursuant to Section 3.06 and (ii) the Trustee shall not be liable for
any acts or omissions of the Servicer occurring prior to such Service Transfer
or for any breach by the Servicer of any of its obligations contained herein or
in any related document or agreement. As compensation therefor, the Trustee
shall be entitled to receive reasonable compensation out of the Monthly
Servicing Fee and the Additional Monthly Servicing Fee. Notwithstanding the
above, the Trustee may, if it shall be unwilling so to act, or shall, if it is
legally unable so to act, appoint, or petition a court of competent jurisdiction
to appoint, an Eligible Servicer as the successor to the Servicer hereunder in
the assumption of all or any part of the responsibilities, duties or liabilities
of the Servicer hereunder. Pending appointment of a successor to the Servicer
hereunder, unless the Trustee is prohibited by law from so acting, the Trustee
shall act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on Contracts as it and such
successor shall agree; provided, however, that no such monthly compensation
shall, without the written consent of 100% of the Certificateholders,
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exceed the Monthly Servicing Fee and the Additional Monthly Servicing Fee. The
Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession.
SECTION 7.04 Notification to Certificateholders.
----------------------------------
a. Promptly following the occurrence of any Event of Termination, the
Servicer shall give written notice thereof to the Trustee, the Rating Agencies
and the Certificateholders at their respective addresses appearing on the
Certificate Register.
b. Within ten days following any termination or appointment of a
successor to the Servicer pursuant to this Article VII, the Trustee shall give
written notice thereof to the Rating Agencies and the Certificateholders at
their respective addresses appearing on the Certificate Register.
c. The Trustee shall give written notice to the Rating Agencies at least
30 days prior to the date upon which any Eligible Servicer (other than the
Trustee) is to assume the responsibilities of Servicer pursuant to Section 7.03,
naming such successor Servicer.
SECTION 7.05 Effect of Transfer.
------------------
a. After the Service Transfer, the Trustee or new Servicer may notify
Obligors to make payments directly to the new Servicer that are due under the
Contracts after the effective date of the Service Transfer.
b. After the Service Transfer, the replaced Servicer shall have no
further obligations with respect to the management, administration, servicing or
collection of the Contracts and the new Servicer shall have all of such
obligations, except that the replaced Servicer will transmit or cause to be
------
transmitted directly to the new Servicer for its own account, promptly on
receipt and in the same form in which received, any amounts (properly endorsed
where required for the new Servicer to collect them) received as payments upon
or otherwise in connection with the Contracts.
c. A Service Transfer shall not affect the rights and duties of the
parties hereunder (including but not limited to the indemnities of the Servicer
and the Originator pursuant to Article X and Sections 3.06, 11.06 and 11.11(f))
other than those relating to the management, administration, servicing or
collection of the Contracts.
SECTION 7.06 Transfer of Certificate Account.
-------------------------------
Notwithstanding the provisions of Section 7.02, if the Certificate Account
shall be maintained with the Servicer and an Event of Termination shall occur
and be continuing, the Servicer shall, after five days' written notice from the
Trustee, or in any event within ten days after the occurrence of the Event of
Termination, establish an Eligible Account with an institution other than the
Servicer and promptly transfer all funds in the Certificate Account to such new
account, which shall thereafter be deemed the Certificate Account for the
purposes hereof.
7-3
ARTICLE VIII
PAYMENTS
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SECTION 8.01 Monthly Payments.
----------------
a. Subject to the terms of this Article VIII, each Holder of a
Certificate as of a Record Date shall be paid on the next succeeding Remittance
Date by check mailed on such Remittance Date to such Certificateholder at the
address for such Certificateholder appearing on the Certificate Register (or, if
such Certificateholder holds a Class of Class A Certificates, Class M
Certificates, or Class B Certificates with an aggregate Percentage Interest of
at least 5% or a Class B-3I, Class C Subsidiary, Class C Intermediate or Class C
Master Certificateholder holds a Class B-3I, Class C Subsidiary, Class C
Intermediate or Class C Master Certificate with an aggregate Percentage Interest
of at least 20% and so requests, by wire transfer pursuant to instructions
delivered to the Trustee at least ten days prior to such Remittance Date), the
sum equal to such Certificateholder's Percentage Interest of all amounts
distributed on the applicable Class of Certificates. Final payment of any
Certificate shall be made only upon presentation of such Certificate at the
office or agency of the Paying Agent.
b. Each distribution with respect to a Book-Entry Certificate shall be
paid to the Depository, which shall credit the amount of such distribution to
the accounts of its Depository Participants in accordance with its normal
procedures. Each Depository Participant shall be responsible for disbursing
such distribution to the Certificate Owners that it represents and to each
indirect participating brokerage firm (a "brokerage firm" or "indirect
participating firm") for which it acts as agent. Each brokerage firm shall be
responsible for disbursing funds to the Certificate Owners that it represents.
All such credits and disbursements with respect to a Book-Entry Certificate are
to be made by the Depository and the Depository Participants in accordance with
the provisions of the Book Entry Certificates. Neither the Trustee, the
Certificate Registrar, the Originator, the Seller nor the Servicer shall have
any responsibility therefor except as otherwise provided by applicable law. To
the extent applicable and not contrary to the rules of the Depository, the
Trustee shall comply with the provisions of the forms of the Class A, Class M,
and Class B Certificates as set forth in Exhibits ▇-▇, ▇-▇, B and C hereto.
c. The Trustee shall either act as the paying agent or shall appoint an
institution meeting the eligibility requirements set forth in Section 11.06 to
be the paying agent (in either case, the "Paying Agent") and cause it to make
the payments to the Certificateholders required hereunder. The Trustee's
Corporate Trust Office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇, shall initially act as Paying Agent. The
Trustee shall require the Paying Agent (if other than the Trustee) to agree in
writing that all amounts held by the Paying Agent for payment hereunder will be
held in trust for the benefit of the Certificateholders and that it will notify
the Trustee of any failure by the Servicer to make funds available to the Paying
Agent for the payment of amounts due on the Certificates.
8-1
SECTION 8.02 Permitted Withdrawals from the Certificate Account.
--------------------------------------------------
The Trustee may, from time to time as provided herein, make withdrawals
from the Certificate Account of amounts deposited in said account pursuant to
Section 5.05 that are attributable to the Contracts for the following purposes:
a. to make payments in the amounts and in the manner provided for in
Section 8.03;
b. to pay to the Originator with respect to each Contract or property
acquired in respect thereof that has been repurchased or replaced pursuant to
Section 3.06, all amounts received thereon and not required to be distributed to
Certificateholders as of the date on which the related Scheduled Principal
Balance or Repurchase Price is determined;
c. to reimburse the Servicer out of Liquidation Proceeds for Liquidation
Expenses incurred by it, to the extent such reimbursement is permitted pursuant
to Section 5.08;
d. to withdraw any amount deposited in the Certificate Account that was
not required to be deposited therein; or
e. to make any rebates or adjustments deemed necessary by the Servicer
pursuant to Section 5.06(d).
Since, in connection with withdrawals pursuant to clause (b), the
Servicer's entitlement thereto is limited to collections or other recoveries on
the related Contract, the Servicer shall keep and maintain separate accounting,
on a Contract by Contract basis, for the purpose of justifying any withdrawal
from the Certificate Account pursuant to such clause.
SECTION 8.03 Payments.
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a. On each Remittance Date the Trustee shall withdraw from the
Certificate Account the Amount Available (as determined on the immediately
preceding Determination Date), plus (x) on the Post-Funding Remittance Date any
Pre-Funded Amount, (y) on the Funding Termination Date any amount withdrawn from
the Staged-Funding Contract Reserve Account and deposited in the Certificate
Account as described in Section 3.08(c), and (z) on the Remittance Dates in May
2001 and June 2001 any amount withdrawn from the Capitalized Interest Account
and deposited in the Certificate Account, and apply such funds to make payment
in the following order of priority, subject to Section 8.03(e):
1. if neither Conseco Finance Corp. nor a wholly owned subsidiary of
Conseco Finance Corp. is the Servicer, to pay the Monthly Servicing Fee and
any other compensation owed to the Servicer pursuant to Section 7.03,
except the Additional Monthly Servicing Fee;
2. after payment of the amount specified in clause (1) above, to the
Class A Certificateholders as follows:
(i) the amount in clause (a)(i) of the definition of Class A Formula
Distribution Amount to the Class A-1A Certificateholders; the
amount in
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clause (a)(ii) to the Class A-1B Certificateholders; (iii) the
amount in clause (a)(iii) above to the Class A-2
Certificateholders; the amount in clause (a)(iv) to the Class
A-3 Certificateholders; the amount in clause (a)(v) to the
Class A-4 Certificateholders; the amount in clause (a)(vi) to
the Class A-5 Certificateholders and the amount in clause
(a)(vii) to the Class A-IO Certificateholders; or, if the
available amount is less than the sum of the amounts specified
in this clause (i), pro rata to each Class of Class A
Certificates based on the amount of interest payable pursuant
to this clause;
(ii) the aggregate Unpaid Class A Interest Shortfall pro rata to
each Class of Class A Certificates based on the Unpaid Class A
Interest Shortfall of each such Class;
3. after payment of the amounts specified in clauses (1) - (2)
above, to the Class M-1 Certificateholders as follows:
(i) the amount in clause (a) of the definition of Class M-1 Formula
Distribution Amount;
(ii) any Unpaid Class M-1 Interest Shortfall;
4. after payment of the amounts specified in clauses (1) - (3)
above, to the Class M-2 Certificateholders as follows:
(i) the amount in clause (a) of the definition of Class M-2 Formula
Distribution Amount;
(ii) any Unpaid Class M-2 Interest Shortfall;
5. after payment of the amounts specified in clauses (1) - (4)
above, to the Class B-1 Certificateholders as follows:
(i) the amount in clause (a) of the definition of Class B-1 Formula
Distribution Amount;
(ii) any Unpaid Class B-1 Interest Shortfall;
6. after payment of the amounts specified in clauses (1) - (5)
above, to the Class A Certificateholders as follows:
(i) if there is a Class A Principal Deficiency Amount as of such
Remittance Date, the remaining Amount Available, pro rata to
each Class of Class A Certificates based on the related Class
Principal Balance (but in no event shall such amount exceed the
related Class Principal Balance);
(ii) the Unpaid Class A Principal Shortfall to the Class A-1A, Class
▇-▇▇, ▇▇▇▇▇ ▇-▇, Class A-3, Class A-4 and Class A-5
Certificateholders in the
8-3
order of priority set forth in clause (iii) below, but to each
Class of Class A Certificates no more than the Unpaid Class A
Principal Shortfall attributable to such Class;
(iii) if such Remittance Date is on or prior to the Class A-5 Cross-
Over Date, the Class A Percentage of the Formula Principal
Distribution Amount to the Class A Certificateholders as
follows:
(a) to the Class A-1A and Class A-1B Certificateholders, pro
rata based on, and in no event more than, their respective
Class Principal Balance;
(b) to the Class A-2 Certificateholders, but in no event more
than the Class A-2 Principal Balance;
(c) to the Class A-3 Certificateholders, but in no event more
than the Class A-3 Principal Balance;
(d) to the Class A-4 Certificateholders, but in no event more
than the Class A-4 Principal Balance;
(e) to the Class A-5 Certificateholders, but in no event more
than the Class A-5 Principal Balance;
7. after payment of the amounts specified in clauses (1) - (6)
above, to the Class M-1 Certificateholders as follows:
(i) any Unpaid Class M-1 Principal Shortfall;
(ii) the Class M-1 Percentage of the Formula Principal Distribution
Amount (plus, if such Remittance Date is on the Class A-5
Cross-Over Date, the amount by which the Class A Percentage of
the Formula Principal Distribution Amount exceeds the Class A
Principal Balance on such date), but in no event more than the
Class M-1 Principal Balance;
(iii) any Class M-1 Liquidation Loss Interest Amount;
(iv) any Unpaid Class M-1 Liquidation Loss Interest Shortfall;
8. after payment of the amounts specified in clauses (1) - (7)
above, to the Class M-2 Certificateholders as follows:
(i) any Unpaid Class M-2 Principal Shortfall;
(ii) the Class M-2 Percentage of the Formula Principal Distribution
Amount (plus, if such Remittance Date is on the Class M-1
Cross-Over Date, the amount, if any, by which the sum of the
Class A Percentage and the Class M-1 Percentage of the Formula
Principal Distribution Amount exceeds the
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sum of the Class A and Class M-1 Principal Balances on such
date), but in no event more than the Class M-2 Principal
Balance;
(iii) any Class M-2 Liquidation Loss Interest Amount;
(iv) any Unpaid Class M-2 Liquidation Loss Interest Shortfall;
9. after payment of the amounts specified in clauses (1) - (8)
above, to the Class B-1 Certificateholders as follows:
(i) any Unpaid Class B-1 Principal Shortfall;
(ii) the Class B Percentage of the Formula Principal Distribution
Amount (plus, if such Remittance Date is on the Class M-2
Cross-Over Date, the amount, if any, by which the sum of the
Class A, Class M-1 and Class M-2 Percentages of the Formula
Principal Distribution Amount exceeds the sum of the Class A,
Class M-1 and Class M-2 Principal Balances on such date), but
in no event more than the Class B-1 Principal Balance;
(iii) any Class B-1 Liquidation Loss Interest Amount;
(iv) any Unpaid Class B-1 Liquidation Loss Interest Shortfall;
10. after payment of the amounts specified in clauses (1) - (9)
above, to the Class B-2 Certificateholders as follows:
(i) the amount in clause (a) of the definition of Class B-2 Formula
Distribution Amount;
(ii) any Unpaid Class B-2 Interest Shortfall;
(iii) any Unpaid Class B-2 Principal Shortfall;
(iv) if such Remittance Date is on or after the Class B-1 Cross-Over
Date, the Class B Percentage of the Formula Principal
Distribution Amount (minus, if such Remittance Date is on the
Class B-1 Cross-Over Date, the amount of the Class B Percentage
of the Formula Principal Distribution Amount actually
distributed to the Class B-1 Certificateholders on such date,
and plus, if such Remittance Date is on the Class B-1 Cross-
Over Date, the amount, if any, by which the Formula Principal
Distribution Amount exceeds the sum of the Class A Principal
Balance, the Class M-1 Principal Balance, the Class M-2
Principal Balance and the Class B-1 Principal Balance on such
date);
11. [reserved];
12. if Conseco Finance Corp. or a wholly owned subsidiary of the
Company is the Servicer, after payment of the amounts specified in clauses
(1) - (11) above, to pay
8-5
the Monthly Servicing Fee and any other compensation owed to the Servicer
pursuant to Section 7.02, and if Conseco Finance Corp. or a wholly owned
subsidiary of Conseco Finance is not the Servicer, to pay the Additional
Monthly Servicing Fee to the Servicer;
13. after payment of the amounts specified in clauses (1) - (12)
above, to the Certificates any Additional Principal Distribution Amount, as
follows and in no case more than the Class Principal Balance of any Class:
(i) to the Class A Certificateholders (first to the Class A-1A and
Class A-1B Certificateholders, pro rata based on the respective Class
Principal Balance of the Class A-1A and Class A-1B Certificateholders,
then sequentially to the Class A-2, Class A-3, Class A-4 and Class A-5
Certificateholders), the amount, if any, by which the aggregate
Additional Principal Distribution Amount distributed on prior
Remittance Dates pursuant to this clause (i) is less than $9,000,000;
and
(ii) on each Additional Principal Payment Date (as defined in Section
8.05(f)), to the Class M-1, Class M-2, Class B-1 and Class B-2
Certificateholders pro rata based upon the Class Principal Balance of
each Class;
14. after payment of the amounts specified in clauses (1) - (13)
above, the Class B-3I Distribution Amount to the Class B-3I
Certificateholders;
15. after payment of the amounts specified in clauses (1) - (14)
above, to reimburse the Class C Certificateholders for expenses incurred by
and reimbursable to them pursuant to Section 10.06; and
16. after payment of the amounts specified in clauses (1) - (15)
above, any remaining funds to the Class C Master Certificateholder.
b. On each Remittance Date, the Uncertificated Intermediate Interests
shall receive distributions, to the extent of the Adjusted Amount Available plus
the amount described in Section 8.03(d), in the following order of priority:
1. To each Class of Uncertificated Intermediate Interests, pro rata
based on its respective entitlement, accrued interest as follows:
(i) for each such Class other than the Class I-AIO Interest, 1/12th
of the Adjusted Weighted Average Contract Rate times the Intermediate
Interest Principal Balance of such Class; provided that interest accrued on
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the Class I-Accrual Interest shall be paid as principal to the Intermediate
REMIC Accretion Directed Interests pursuant to Section 8.03(b)(2), and
added to the Intermediate Interest Principal Balance of the Class I-Accrual
Interest, in an amount equal to the sum of (A) one-half the
Overcollateralization Amount Increase for that Remittance Date plus (B) any
amount by which one-half the aggregate of the Overcollateralization Amount
Increases on prior Remittance Dates exceeds the aggregate amount so paid to
the Intermediate REMIC Accretion Directed Interests and added to the Class
I-Accrual Interest (such excess not to accrue interest); and
8-6
(ii) for the Class I-AIO Interest, interest at a rate per annum
equal to (A) 2.50% multiplied by the sum of the Subsidiary Interest
Adjusted Principal Balance of the (1) Class S-2(1) Interest through and
including the July 2001 Remittance Date, (2) Class S-2(2) Interest through
and including the October 2001 Remittance Date, (3) Class S-2(3) Interest
through and including the January 2002 Remittance Date, (4) Class S-2(4)
Interest through and including the April 2002 Remittance Date, (5) Class S-
2(5) Interest through and including the July 2002 Remittance Date, (6)
Class S-2(6) Interest through and including the October 2002 Remittance
Date, (7) Class S-2(7) Interest through and including the January 2003
Remittance Date, (8) Class S-2(8) Interest through and including the April
2003 Remittance Date, (9) Class S-2(9) Interest through and including the
July 2003 Remittance Date, (10) Class S-2(10) Interest through and
including the October 2003 Remittance Date, (11) Class S-2(11) Interest
through and including the January 2004 Remittance Date, (12) Class S-2(12)
Interest through and including the April 2004 Remittance Date, (13) Class
S-2(13) Interest through and including the July 2004 Remittance Date, (14)
Class S-2(14) Interest through and including the October 2004 Remittance
Date, (15) Class S-2(15) Interest through and including the January 2005
Remittance Date, (16) Class S-2(16) Interest through and including the
April 2005 Remittance Date, (17) Class S-2(17) Interest through and
including the July 2005 Remittance Date, (18) Class S-2(18) Interest
through and including the October 2005 Remittance Date, (19) Class S-2(19)
Interest through and including the January 2006 Remittance Date, (20) Class
S-2(20) Interest through and including the April 2006 Remittance Date, (21)
Class S-2(21) Interest through and including the July 2006 Remittance Date,
(22) Class S-2(22) Interest through and including the October 2006
Remittance Date and (23) Class S-2(23) Interest through and including the
January 2007 Remittance Date and (B) 0% after the January 2007 Remittance
Date, plus
(iii) any Unpaid Intermediate Interest Shortfall with respect to such
Class;
2. To the Class I-Accrual Interest, principal in an amount equal
to one-half the principal distributed on the Class A, Class M and Class B
Certificates on such Remittance Date; and to each Intermediate REMIC
Accretion Directed Interest, principal (including that payable to the
Intermediate REMIC Accretion Directed Interests as described in Section
8.0(b)(1)(i)) in an amount equal to one-half the principal distributed to
its Corresponding Certificate Class on such Remittance Date. Realized
losses shall be allocated to each Class of Uncertificated Intermediate
Interests in an amount sufficient to reduce the Intermediate REMIC
Principal Balance of (i) the Class I-Accrual Interest to one-half the sum
of (A) the Pool Scheduled Principal Balance, (B) the Pre-Funded Amount and
(C) the Overcollateralization Amount and (b) each Class of Intermediate
REMIC Accretion Directed Interests to one-half the Class Principal Balance
of its Corresponding Certificate Class after giving effect to distributions
on such Remittance Date.
3. To the Class C Intermediate Certificateholder, any remaining
Amount Available.
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c. On each Remittance Date, the Uncertificated Subsidiary Interests shall
receive distributions, to the extent of the Adjusted Amount Available plus the
amount described in Section 8.03(d), in the following order of priority:
1. Each of the Class S-1 and Class S-2 Interests shall receive
distributions of interest, pro rata based on their respective entitlements,
in an amount equal to (i) 1/12 of the Weighted Average Contract Rate times
the Subsidiary Interest Principal Balance of such Class, plus (ii) any
Unpaid Subsidiary Interest Shortfall with respect to such Class;
2. Distributions of principal shall be made to each Class S-1 and
Class S-2 Interest sequentially, i.e., first to the Class S-1 Interest,
second to the Class S-2(1) Interest and last (after each other Class S-2
Interest) to the Class S-2(23) Interest, in an amount equal to its
respective Subsidiary Interest Principal Balance; and
3. Any remaining Amount Available shall be distributed to the Class C
Subsidiary Certificateholder.
d. If the applicable Monthly Report indicates a Class M-1 Interest
Deficiency Amount, a Class M-2 Interest Deficiency Amount and/or a Class B-1
Interest Deficiency Amount for such Remittance Date, the Trustee shall withdraw
from the Certificate Account (to the extent of funds on deposit therein one
Business Day prior to such Remittance Date, after distribution of the Amount
Available pursuant to Section 8.03(a)) an amount equal to the Class M-1 Interest
Deficiency Amount, the Class M-2 Interest Deficiency Amount and the Class B-1
Interest Deficiency Amount (or the amount of such funds in the Certificate
Account, if less) and distribute such amount, first to the Class M-1
Certificateholders up to the amount of the Class M-1 Interest Deficiency Amount
(or pro rata, if such funds are less than the Class M-1 Interest Deficiency
Amount), if any, then to the Class M-2 Certificateholders up to the amount of
the Class M-2 Interest Deficiency Amount (or pro rata, if such funds are less
than the Class M-2 Interest Deficiency Amount), if any, and then to the Class B-
1 Certificateholders up to the amount of the Class B-1 Interest Deficiency
Amount (or pro rata, if such remaining funds are less than the Class B-1
Interest Deficiency Amount); provided, however, that (i) no such withdrawal
shall be made with respect to the Class M-1 Interest Deficiency Amount if the
Cumulative Realized Losses as of such Remittance Date are greater than
$144,000,000; (ii) no such withdrawal shall be made with respect to the Class M-
2 Interest Deficiency Amount if the Cumulative Realized Losses as of such
Remittance Date are greater than $120,000,000; (iii) no withdrawal with respect
to Class B-1 Interest Deficiency Amount shall be made if the Cumulative Realized
Losses as of such Remittance Date are greater than $96,000,000; (iv) no
withdrawal with respect to a Class M-1 Interest Deficiency Amount shall be made
if the aggregate withdrawals with respect to all prior Class M-1 Interest
Deficiency Amounts equal $2,034,450; (v) no withdrawal with respect to a Class
M-2 Interest Deficiency Amount shall be made if the aggregate withdrawals with
respect to all prior Class M-2 Interest Deficiency Amounts equal $1,793,250; and
(vi) no withdrawal with respect to a Class B-1 Interest Deficiency Amount shall
be made if the aggregate withdrawals with respect to all prior Class B-1
Interest Deficiency Amounts equal $2,005,875.
e. Notwithstanding the priorities set forth above, any Pre-Funded Amount
deposited in the Certificate Account shall be applied solely to pay principal of
the Class A-1A and
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Class A-1B Certificates, pro rata based on their respective Class Principal
Balance, and any amount withdrawn from the Capitalized Interest Account and
deposited in the Certificate Account shall be applied solely as described in
Section 8.06.
f. If the Trustee shall not have received the applicable Monthly Report
by any Remittance Date, the Trustee shall distribute all funds then in the
Certificate Account to Certificateholders in accordance with Section 8.03(a), to
the extent of such funds, on such Remittance Date.
SECTION 8.04 [Reserved].
----------
SECTION 8.05 Class C Subsidiary Certificateholder's Purchase Option;
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Auction Sale; Additional Principal Distribution Amount.
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a. Subject to the conditions in subsection (b) below, the Class C
Subsidiary Certificateholder shall have the option to purchase all of the
Contracts and all property acquired in respect of any Contract remaining in the
Trust at a price (such price being referred to as the "Minimum Purchase Price")
equal to the greater of:
A. the sum of (x) 100% of the principal balance of each Contract (other
than any Contract as to which title to the underlying property has
been acquired and whose fair market value is included pursuant to
clause (y) below), plus (y) the fair market value of such acquired
property (as determined by the Originator as of the close of business
on the third Business Day next preceding the date upon which notice of
any such termination is furnished to Certificateholders pursuant to
Section 12.03) or
B. the aggregate fair market value (as determined by the Originator as of
the close of business on such third Business Day) of all of the assets
of the Trust,
plus, in either case, any Unpaid Class A Interest Shortfall, any Unpaid Class M-
1 Interest Shortfall, any Unpaid Class M-1 Liquidation Loss Interest Shortfall,
any Unpaid Class M-2 Interest Shortfall, any Unpaid Class M-2 Liquidation Loss
Interest Shortfall, any Unpaid Class B-1 Interest Shortfall, any Unpaid Class B-
1 Liquidation Loss Interest Shortfall and any Unpaid Class B-2 Interest
Shortfall as well as one month's interest at the applicable Contract Rate on the
Scheduled Principal Balance of each Contract (including any Contract as to which
the related Manufactured Home has been repossessed).
b. The purchase by the Class C Subsidiary Certificateholder of all of the
Contracts pursuant to Section 8.05(a) above shall be at the option of the Class
C Subsidiary Certificateholder, but shall be conditioned upon (1) the Pool
Scheduled Principal Balance, at the time of any such purchase, aggregating not
more than 20% of the Cut-off Date Pool Principal Balance, (2) such purchase
being made pursuant to a plan of complete liquidation of each of the Subsidiary
REMIC, Intermediate REMIC and Master REMIC in accordance with Section 860F of
the Code, as provided in Section 12.03, (3) the Class C Subsidiary
Certificateholder having provided the Trustee, the Servicer and the Depository
(if any) with at least 30 days' and not more than 60 days' written notice
specifying the purchase date, which shall be a Remittance Date,
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(4) the Class C Subsidiary Certificateholder having delivered to the Trustee an
unqualified Opinion of Counsel stating that payment of the purchase price to the
Certificateholders will not constitute a voidable preference or fraudulent
transfer under the United States Bankruptcy Code and (5) the Trustee not having
accepted a qualifying bid for the Contracts pursuant to Section 8.05(e).
The Trustee shall acknowledge in writing its receipt of notice given under
this Section 8.05(b). On the purchase date specified in its notice, the Class C
Subsidiary Certificateholder shall deliver the purchase price to the Trustee, in
immediately available funds, the Trustee shall deposit the purchase price in the
Certificate Account for distribution in accordance with Section 12.03, and the
Trustee and the Servicer shall release to the Class C Subsidiary
Certificateholder the Contract Files and Land-and-Home Contract Files for all
the purchased Contracts. The Trustee shall execute all assignments,
endorsements and other instruments necessary to effectuate such transfer.
c. The Class C Subsidiary Certificateholder may assign its rights under
this Section 8.05, separately from its other rights as Holder of the Class C
Subsidiary Certificate, by giving written notice of such assignment to the
Trustee and the Servicer. Following the Trustee's receipt of such notice of
assignment, the Trustee shall recognize only such assignee (or its assignee in
turn) as the Person entitled to exercise the purchase option set forth in
Section 8.05(a).
d. The Servicer shall notify the Trustee, any assignee described in
Section 8.05(c), and the Class C Subsidiary Certificateholder (whether or not
the Class C Subsidiary Certificateholder has then assigned its rights under this
Section 8.05 pursuant to subsection (c)) no later than two Business Days after
the Determination Date occurring in the first Due Period which includes the date
on which the Pool Scheduled Principal Balance first becomes less than or equal
to 20% of the Cut-off Date Pool Principal Balance, to the effect that the Pool
Scheduled Principal Balance is then less than or equal to 20% of the Cut-off
Date Pool Principal Balance.
e. If the Class C Subsidiary Certificateholder (or its assignee) has not
delivered to the Trustee the notice of exercise of its purchase option described
in subsection (b) by the Remittance Date occurring in the month following the
Due Period specified in subsection (d), then promptly after the following
Remittance Date the Trustee shall begin a process for soliciting bids in
connection with an auction for the Contracts. The Trustee shall provide the
Class C Subsidiary Certificateholder (or its assignee) written notice of such
auction at least 10 Business Days prior to the date bids must be received in
such auction (the "Auction Date").
If at least two bids are received, the Trustee shall solicit and resolicit
new bids from all participating bidders until only one bid remains or the
remaining bidders decline to resubmit bids. The Trustee shall accept (in
writing) the highest of such remaining bids if it is equal to or in excess of
the greater of (i) the Minimum Purchase Price (as defined in Section 8.05(a))
and (ii) the fair market value of the Contracts and related property (such
amount being referred to as the "Minimum Auction Price"). If less than two bids
are received or the highest bid after the resolicitation process is completed is
not equal to or in excess of the Minimum Auction Price, the Trustee shall not
consummate such sale. If a bid meeting the Minimum Purchase Price is received,
then the Trustee may, and if so requested by the Class C Subsidiary
Certificateholder
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or Class B-3I Certificateholder shall, consult with a financial advisor, which
may be an underwriter of the Certificates, to determine if the fair market value
of the Contracts and related property has been offered.
If the first auction conducted by the Trustee does not produce any bid at
least equal to the Minimum Auction Price, then the Trustee shall, beginning on
the Remittance Date occurring approximately three months after the Auction Date
for the failed first auction, commence another auction in accordance with the
requirement of this subsection (e). If such second auction does not produce any
bid at least equal to the Minimum Auction Price, then the Trustee shall,
beginning on the Remittance Date occurring approximately three months after the
Auction Date for the failed second auction, commence another auction in
accordance with the requirements of this subsection (e), and shall continue to
conduct similar auctions approximately every three months thereafter until the
earliest of (i) delivery by the Class C Subsidiary Certificateholder or its
assignee of notice of exercise of its purchase option under subsection (a), (ii)
receipt by the Trustee of a bid meeting the conditions specified in the
preceding paragraph, or (iii) the Remittance Date on which the principal balance
of all the Contracts is reduced to zero.
The bid price shall be payable to the Trustee in immediately available
funds. Upon payment to the Trustee of the purchase price under an accepted bid,
the Trustee shall deposit the purchase price in the Certificate Account for
distribution in accordance with Section 12.03, and the Trustee and the Servicer
shall release to the winning bidder the Contract Files and Land-and-Home
Contract Files for all the purchased Contracts. The Trustee shall execute all
assignments, endorsements and other instruments necessary to effectuate such
transfer.
f. If the Class C Subsidiary Certificateholder (or its assignee) has not
delivered to the Trustee the notice of exercise of its purchase option described
in subsection (b) by the Remittance Date occurring in the month following the
Due Period specified in subsection (d), then on the following Remittance Date
and each Remittance Date thereafter (each, an "Additional Principal Payment
Date") the Class M-1, Class M-2, Class B-1 and Class B-2 Certificates shall be
entitled to receive the Additional Principal Distribution Amount, allocated
among such classes pro rata based upon the outstanding Principal Balance of each
such Class on each such Remittance Date.
g. On and after the Remittance Date occurring in the month following the
Due Period specified in subsection (d), if the Class C Subsidiary
Certificateholder does not exercise its option to purchase the Contracts, the
Class A-5 Pass-Through Rate will increase by 0.50% per annum.
SECTION 8.06 Capitalized Interest Account.
----------------------------
a. On or before the Closing Date, the Trustee shall establish the
Capitalized Interest Account on behalf of the Trust, which must be an Eligible
Account, and shall deposit therein $0 received from the Seller pursuant to
Section 2.02(u). The Capitalized Interest Account shall be entitled "U.S. Bank
National Association as Trustee for the benefit of holders of Manufactured
Housing Contract Senior/Subordinate Pass-Through Certificates Series 2001-1."
On the Remittance Dates occurring in May 2001 and June 2001, if the Monthly
Report for such Remittance Date indicates that the Amount Available (after
payment of the amount specified in
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clause (1) of Section 8.03(a) and including in the Amount Available only
payments in respect of interest on the Contracts) is not sufficient to pay the
Class A Interest Distribution Amount, plus the Class M-1 Interest Distribution
Amount, plus the Class M-2 Interest Distribution Amount, plus the Class B-1
Interest Distribution Amount, the Trustee shall withdraw the amount of such
deficiency, or the amount of funds in the Capitalized Interest Account (net of
any investment earnings thereon), if less, and shall deposit such funds in the
Certificate Account for distribution on such Remittance Date in order first to
pay any deficiency in the Amount Available to pay the Class A Interest
Distribution Amount, second to pay any deficiency in the Amount Available to pay
the Class M-1 Interest Distribution Amount, third to pay any deficiency in the
Amount Available to pay the Class M-2 Interest Distribution Amount, and fourth
to pay any deficiency in the Amount Available to pay the Class B-1 Interest
Distribution Amount.
b. The Capitalized Interest Account shall be part of the Trust but not
part of the Subsidiary REMIC, Intermediate REMIC or Master REMIC. The Trustee
on behalf of the Trust shall be the legal owner of the Capitalized Interest
Account. Green Tree Finance Corp.-Two shall be the beneficial owner of the
Capitalized Interest Account, subject to the foregoing power of the Trustee to
transfer amounts in the Capitalized Interest Account to the Certificate Account.
Funds in the Capitalized Interest Account shall, at the direction of Green Tree
Finance Corp.-Two, be invested in Eligible Investments that mature no later than
the Business Day prior to the next succeeding Remittance Date. All net income
and gain from such investments shall be distributed to Green Tree Finance Corp.-
Two on such Remittance Date. All amounts earned on amounts on deposit in the
Capitalized Interest Account shall be taxable to Green Tree Finance Corp.-Two.
Any losses on such investments shall be deposited in the Capitalized Interest
Account by Green Tree Finance Corp.-Two out of its own funds immediately as
realized.
c. Any funds remaining in the Capitalized Interest Account after the
Remittance Date in June 2001 shall be distributed to Green Tree Finance Corp.-
Two on such Remittance Date. After such date no further amounts shall be
deposited in or withdrawn from the Capitalized Interest Account.
SECTION 8.07 Pre-Funding Account.
-------------------
a. On or before the Closing Date, the Trustee shall establish the Pre-
Funding Account on behalf of the Trust, which must be an Eligible Account. The
Pre-Funding Account shall be entitled "Pre-Funding Account, U.S. Bank National
Association as Trustee for the benefit of holders of Certificates, Series 2001-
1." The Trustee shall maintain within the Pre-Funding Account two subaccounts,
the Pre-Funding Subaccount and the Undelivered Contract Subaccount. The
Undelivered Contract Subaccount pertains to those Land-and-Home Contracts
transferred to the Trust on the Closing Date that are Undelivered Contracts.
Funds deposited in the Pre-Funding Account shall be held in trust by the Trustee
for the Holders of the Certificates for the uses and purposes set forth herein.
b. The Trustee shall deposit in the Pre-Funding Subaccount the amount
received from the Seller pursuant to Section 2.02(v). Amounts on deposit in the
Pre-Funding Subaccount shall be withdrawn by the Trustee as follows:
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(i) On any Subsequent Transfer Date, the Trustee shall withdraw an
amount equal to 100% of the Cut-off Date Principal Balance of each
Subsequent Contract transferred and assigned to the Trustee on such
Subsequent Transfer Date and pay such amount to or upon the order of the
Seller upon satisfaction of the conditions set forth in Section 2.03(b)
with respect to such transfer and assignment.
(ii) On the Business Day immediately preceding the Post-Funding
Remittance Date, the Trustee shall deposit into the Certificate Account any
amounts remaining in the Pre-Funding Subaccount, net of investment
earnings.
c. The Trustee shall deposit in the Undelivered Contract Subaccount the
amount received from the Seller pursuant to Section 2.02(w). Amounts on deposit
in the Undelivered Contract Subaccount shall be withdrawn by the Trustee as
follows:
(i) If the Seller delivers the related Land-and-Home Contract File
for an Undelivered Contract to the Trustee at least two Business Days
before the last day of the Pre-Funding Period, the Trustee shall withdraw
an amount equal to 100% of the Cut-off Date Principal Balance of such
Contract and pay such amount to or upon the order of the Seller.
(ii) [Reserved]
(iii) The Seller shall give the Trustee telephonic notice of its
intended delivery of Land-and-Home Contract Files. The Trustee will use
reasonable efforts to process the Land-and-Home Contract Files and remit
any amount payable for them to the Seller in a timely manner.
(iv) On the Business Day immediately preceding the Post-Funding
Remittance Date, the Trustee shall deposit into the Certificate Account any
amounts remaining in the Undelivered Contract Subaccount, net of investment
earnings.
d. The Pre-Funding Account shall be part of the Trust but not part of the
Master REMIC, Intermediate REMIC or Subsidiary REMIC. The Trustee on behalf of
the Trust shall be the legal owner of the Pre-Funding Account. The Seller shall
be the beneficial owner of the Pre-Funding Account, subject to the foregoing
power of the Trustee to transfer amounts in the Pre-Funding Account to the
Certificate Account. Funds in the Pre-Funding Account shall, at the direction
of the Servicer, be invested in Eligible Investments of the kind described in
clauses (i) and (ii)(A) of the definition of "Eligible Investment" and that
mature no later than the Business Day prior to the next succeeding Remittance
Date. All amounts earned on deposits in the Pre-Funding Account shall be
taxable to the Seller. Any losses on such investments shall be deposited in the
Pre-Funding Account by the Seller immediately as realized. The Trustee shall
release to the Seller all investment earnings in the Pre-Funding Account on the
Post-Funding Remittance Date.
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ARTICLE IX
THE CERTIFICATES AND UNCERTIFICATED SUBSIDIARY INTERESTS
--------------------------------------------------------
SECTION 9.01 The Certificates.
----------------
a. The Uncertificated Subsidiary Interests shall be issued as
nontransferable (except to a successor Trustee) uncertificated interests
evidencing, as to each such Class, 100% of the interest in distributions
required to made to such Class, and having the Original Principal Balance
specified with respect to such Class of Uncertificated Subsidiary Interests.
The Class C Subsidiary Certificate shall be substantially in the form set forth
in Exhibit J hereto, and shall, on original issue, be executed by the Trustee on
behalf of the Trust upon order of the Originator. The Class C Subsidiary
Certificate shall be issuable in Percentage Interests, and shall be evidenced by
a single Class C Subsidiary Certificate issued on the Closing Date to Green Tree
Finance Corp.-Two.
b. The Uncertificated Intermediate Interests shall be issued as
nontransferable (except to a successor Trustee) uncertificated interests
evidencing, as to each such Class, 100% of the interest in distributions
required to made to such Class, and having the Original Principal Balance
specified with respect to such Class of Uncertificated Intermediate Interests.
The Class C Intermediate Certificate shall be substantially in the form set
forth in Exhibit J hereto, and shall, on original issue, be executed by the
Trustee on behalf of the Trust upon order of the Originator. The Class C
Intermediate Certificate shall be issuable in Percentage Interests, and shall be
evidenced by a single Class C Intermediate Certificate issued on the Closing
Date to Green Tree Finance Corp.-Two.
c. The Class A, the Class M, the Class B, the Class B-3I and the
Class C Master Certificates shall be substantially in the forms set forth in
Exhibits ▇-▇, ▇-▇, ▇, ▇-▇, ▇-▇, and J, respectively, and shall, on original
issue, be executed by the Trustee on behalf of the Trust to or upon the order of
the Originator. The Class A, the Class M, and the Class B Certificates shall be
evidenced by (i) one or more Class A-1A Certificates representing $70,000,000
initial aggregate principal balance, (ii) one or more Class A-1B Certificates
representing $59,000,000 initial aggregate principal balance, (iii) one or more
Class A-2 Certificates representing $22,300,000 initial aggregate principal
balance, (iv) one or more Class A-3 Certificates representing $63,400,000
initial aggregate principal balance, (v) one or more Class A-4 Certificates
representing $96,200,000 initial aggregate principal balance, (vi) one or more
Class A-5 Certificates representing $175,100,000 initial aggregate principal
balance, (vii) one or more Class A-IO Certificates representing $120,000,000 in
Original Notional Principal Amount, (viii) one or more Class M-1 Certificates
representing $36,000,000 initial aggregate principal balance, (ix) one or more
Class M-2 Certificates representing $30,000,000 initial aggregate principal
balance, (x) one or more Class B-1 Certificates representing $30,000,000 initial
aggregate principal balance, and (xi) one or more Class B-2 Certificates
representing $18,000,000 initial aggregate principal balance. Beneficial
ownership of the Class A, Class M and Class B-1 Certificates shall be held
through Book-Entry Certificates. The Class B-2 Certificates shall not be Book-
Entry Certificates as of the Closing Date, but may at the option of the Class B-
2 Certificateholder be converted into Book-Entry Certificates at any time
thereafter, upon compliance with the normal procedures of the Trustee and the
Depository. The Class A, Class M
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and Class B Certificates shall be issuable in minimum dollar denominations of
$1,000 and integral dollar multiples of $1,000 in excess thereof. The Class B-
3I, Class C Master, Class C Intermediate and Class C Subsidiary Certificates
shall be issuable in Percentage Interests and shall each be evidenced by a
single certificate issued on the Closing Date to Green Tree Finance Corp.-Two.
d. The Certificates shall be executed by manual signature on behalf of
the Trustee by a duly authorized Responsible Officer or authorized signatory.
Certificates bearing the signatures of individuals who were at any time the
proper officers of the Trustee shall bind the Trustee, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
execution and delivery of such Certificate or did not hold such offices at the
date of such Certificates. No Certificate shall be entitled to any benefit
under this Agreement, or be valid for any purpose, unless such Certificate has
been executed by manual signature in accordance with this Section, and such
signature upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly executed and delivered hereunder.
All Certificates shall be dated the date of their execution, except for those
Certificates executed on the Closing Date, which shall be dated the Closing
Date.
SECTION 9.02 Registration of Transfer and Exchange of Certificates.
-----------------------------------------------------
a. The Trustee shall keep at the office or agency to be maintained in
accordance with Section 12.02 a "Certificate Register" in which the Trustee
shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. The Trustee initially appoints
itself to be the "Certificate Registrar" and transfer agent for the purpose of
registering Certificates and transfers and exchanges of Certificates as provided
herein. The Trustee will give prompt written notice to Certificateholders and
the Servicer of any change in the Certificate Registrar.
b. (1) Subject to clauses (2) and (3) below, no transfer of a Class B-2
Certificate, Class B-3I Certificate or Class C Certificate shall be made by the
Originator or any other Person unless such transfer is exempt from the
registration requirements of the Act, as amended, and any applicable state
securities laws or is made in accordance with the Act and laws. In the event
that any such transfer is to be made, (A) the Originator may require a written
Opinion of Counsel acceptable to and in form and substance satisfactory to the
Originator that such transfer may be made pursuant to an exemption, describing
the applicable exemption and the basis therefor, from the Act and laws or is
being made pursuant to the Act and laws, which Opinion of Counsel shall not be
an expense of the Trustee or the Originator, and (B) the Trustee shall require
the transferee to execute an investment letter substantially in the form of
Exhibit M attached hereto, which investment letter shall not be an expense of
the Trustee or the Originator. Any Class B-2 Certificateholder, Class B-3I
Certificateholder or Class C Certificateholder desiring to effect such transfer
shall, and does hereby agree to, indemnify the Trustee, the Originator and the
Certificate Registrar against any liability that may result if the transfer is
not so exempt or is not made in accordance with such federal and state laws.
(2) No transfer of a Class B-2 Certificate, Class B-3I Certificate or
Class C Certificate or any interest therein, shall be made to any employee
benefit plan, trust or account that is subject to ERISA, or that is described in
Section 4975(e)(1) of the Code (each, a "Plan"),
9-2
or to any person investing on behalf of or with "plan assets" or a plan unless
the prospective transferee of a Certificate or interest therein provides the
Servicer and the Trustee with a certification of facts and, at its own expense,
an Opinion of Counsel which establish to the satisfaction of the Servicer and
the Trustee that such transfer will not result in a violation of Section 406 of
ERISA or Section 4975 of the Code or cause the Servicer, the Originator or the
Trustee to be deemed a fiduciary of such Plan or result in the imposition of an
excise tax under Section 4975 of the Code.
(3) Notwithstanding anything to the contrary contained herein, (A) no
Class C Certificate, nor any interest therein, shall be transferred, sold or
otherwise disposed of to a "disqualified organization," within the meaning of
Section 860E(e)(5) of the Code (a "Disqualified Organization"), including, but
not limited to, (i) the United States, a state or political subdivision thereof,
a foreign government, an international organization or an agency or
instrumentality of any of the foregoing, (ii) an organization (other than a
cooperative described in Section 521 of the Code) which is exempt from the taxes
imposed by Chapter 1 of the Code and not subject to the tax imposed on unrelated
business income by Section 511 of the Code, or (iii) a cooperative described in
Section 1381(a)(2)(C) of the Code, and (B) prior to any registration of any
transfer, sale or other disposition of the Class C Subsidiary Certificate or
Class C Master Certificate, the proposed transferee shall deliver to the
Trustee, under penalties of perjury, an affidavit that such transferee is not a
Disqualified Organization, with respect to which the Trustee shall have no
actual knowledge that such affidavit is false, and the transferor and the
proposed transferee shall each deliver for the Trustee an affidavit with respect
to any other information reasonably required by the Trustee pursuant to the
REMIC Provisions, including, without limitation, information regarding the
transfer of noneconomic residual interests and transfers of any residual
interest to or by a foreign person; provided, however, that, upon the delivery
to the Trustee of an Opinion of Counsel, in form and substance satisfactory to
the Trustee and rendered by Independent counsel, to the effect that the
beneficial ownership of the Class C Certificate by any Disqualified Organization
will not result in the imposition of federal income tax upon the Subsidiary
REMIC, Intermediate REMIC or Master REMIC or any Certificateholder or any other
person or otherwise adversely affect the status of the Subsidiary REMIC,
Intermediate REMIC or Master REMIC as a REMIC, the foregoing prohibition on
transfers, sales and other dispositions, as well as the foregoing requirement to
deliver a certificate prior to any registration thereof, shall, with respect to
such Disqualified Organization, terminate. Notwithstanding any transfer, sale
or other disposition of a Class C Certificate, or any interest therein, to a
Disqualified Organization or the registration thereof in the Certificate
Register, such transfer, sale or other disposition and any registration thereof,
unless accompanied by the Opinion of Counsel described in the preceding
sentence, shall be deemed to be void and of no legal force or effect whatsoever
and such Disqualified Organization shall be deemed to not be the Class C
Certificateholder for any purpose hereunder, including, but not limited to, the
receipt of distributions on the Class C Certificate, and shall be deemed to have
no interest whatsoever in the Class C Certificate. Each Class C
Certificateholder, by his acceptance thereof, shall be deemed for all purposes
to have consented to the provisions of this Section 9.02(b)(3).
(4) Any transfer, sale or other disposition not in compliance with the
provisions of this Section 9.02(b) shall be deemed to be void and of no legal
force or effect whatsoever and such transferee shall be deemed to not be the
Certificateholder for any purpose
9-3
hereunder, including, but not limited to, the receipt of distributions on such
Certificate, and shall be deemed to have no interest whatsoever in such
Certificate.
(5) The Trustee shall give notice to Standard & Poor's, Moody's and
Fitch promptly following any transfer, sale or other disposition of a Class B-3I
or Class C Certificate.
c. At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of authorized denominations of a like aggregate original
denomination, upon surrender of such Certificates to be exchanged at such
office. Whenever any Certificates are so surrendered for exchange, the Trustee
shall execute and deliver the Certificates which the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or surrendered
for transfer or exchange shall be duly endorsed by, or shall be accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder thereof or his or her attorney
duly authorized in writing.
d. Except as provided in paragraph (e) below, the Book-Entry Certificates
shall at all times remain registered in the name of the Depository or its
nominee and at all times: (i) registration of the Book-Entry Certificates may
not be transferred by the Trustee except to another Depository; (ii) the
Depository shall maintain book-entry records with respect to the Certificate
Owners and with respect to ownership and transfers of such Book-Entry
Certificates; (iii) ownership and transfers of registration of the Book-Entry
Certificates on the books of the Depository shall be governed by applicable
rules established by the Depository; (iv) the Depository may collect its usual
and customary fees, charges and expenses from its Depository Participants; (v)
the Trustee shall deal with the Depository, Depository Participants and indirect
participating firms as representatives of the Certificate Owners of the Book-
Entry Certificates for purposes of exercising the rights of Holders under this
Agreement, and requests and directions for and votes of such representatives
shall not be deemed to be inconsistent if they are made with respect to
different Certificate Owners; and (vi) the Trustee may rely and shall be fully
protected in relying upon information furnished by the Depository with respect
to its Depository Participants and furnished by the Depository Participants with
respect to indirect participating firms and persons shown on the books of such
indirect participating firms as direct or indirect Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository Participant
or brokerage firm representing such Certificate Owner. Each Depository
Participant shall only transfer Book-Entry Certificates of Certificate Owners it
represents or of brokerage firms for which it acts as agent in accordance with
the Depository's normal procedures.
e. If (x) the Seller or the Depository advises the Trustee in writing
that the Depository is no longer willing or able properly to discharge its
responsibilities as Depository and (y) the Trustee or the Originator is unable
to locate a qualified successor or (z) the Originator at its sole option advises
the Trustee in writing that it elects to terminate the book-entry system through
the Depository, the Trustee shall notify all Certificate Owners, through the
Depository, of the occurrence of any such event and of the availability of
definitive, fully registered Class A Certificates, Class M Certificates and
Class B Certificates (the "Definitive Certificates") to Certificate Owners
requesting the same. Upon surrender to the Trustee of the Class A
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Certificates, Class M-1 Certificates, Class M-2 Certificates and Class B
Certificates by the Depository, accompanied by registration instructions from
the Depository for registration, the Trustee shall issue the Definitive
Certificates. Neither the Originator nor the Trustee shall be liable for any
delay in delivery of such instructions and may conclusively rely on, and shall
be protected in relying on, such instructions. Upon the issuance of Definitive
Certificates all references herein to obligations imposed upon or to be
performed by the Depository shall be deemed to be imposed upon and performed by
the Trustee, to the extent applicable with respect to such Definitive
Certificates and the Trustee shall recognize the Holders of the Definitive
Certificates as Certificateholders hereunder.
f. On or prior to the Closing Date, there shall be delivered to the
Depository one Class A-1A Certificate, one Class A-1B Certificate, one Class A-2
Certificate, one Class A-3 Certificate, one Class A-4 Certificate, one Class A-5
Certificate, one Class A-IO Certificate, one Class M-1 Certificate, one Class M-
2 Certificate, and one Class B-1 Certificate, each in registered form registered
in the name of the Depository's nominee, Cede & Co., the total face amount of
which represents 100% of the related Original Principal Balance or Original
Notional Principal Amount, respectively. At any time after the Closing Date,
subject to compliance with the normal procedures of the Trustee and the
Depository, the Class B-2 Certificateholders may deliver to the Depository one
Class B-2 Certificate, registered in the name of Cede & Co. (or other nominee of
the Depository), the total face amount of which represents 100% of the Original
Principal Balance of the Class B-2 Certificate. If, however, the aggregate
principal amount of a Class of Class A Certificates, Class M Certificates or
Class B Certificates exceeds $400,000,000, one such Class A Certificate, Class M
Certificate and/or Class B Certificate will be issued with respect to each
$400,000,000 of principal amount and an additional Certificate of such Class or
Classes will be issued with respect to any remaining principal amount. Each
such Class A, Class M and Class B Certificate registered in the name of the
Depository's nominee shall bear the following legend:
"Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC") to Issuer or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein."
SECTION 9.03 No Charge; Disposition of Void Certificates.
-------------------------------------------
No service charge shall be made to a Certificateholder for any transfer or
exchange of Certificates, but the Certificate Registrar may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of Certificates. All Certificates
surrendered for transfer and exchange shall be disposed of in a manner approved
by the Trustee.
9-5
SECTION 9.04 Mutilated, Destroyed, Lost or Stolen Certificates.
-------------------------------------------------
If (a) any mutilated Certificate is surrendered to the Certificate
Registrar, or the Certificate Registrar receives evidence to its satisfaction of
the destruction, loss or theft of any Certificate, and (b) there is delivered to
the Certificate Registrar and the Trustee such security or indemnity as may be
required by each to save it harmless, then in the absence of notice to the
Certificate Registrar or the Trustee that such Certificate has been acquired by
a bona fide purchaser, the Trustee shall execute and deliver, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like tenor and original denomination. Upon the issuance of any
new Certificate under this Section 9.04, the Trustee may require the payment of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses connected therewith. Any
duplicate Certificate issued pursuant to this Section 9.04 shall constitute
complete and indefeasible evidence of ownership of the Percentage Interest, as
if originally issued, whether or not the mutilated, destroyed, lost or stolen
Certificate shall be found at any time.
SECTION 9.05 Persons Deemed Owners.
---------------------
Prior to due presentation of a Certificate for registration of transfer,
the Servicer, the Seller, the Trustee, the Paying Agent and the Certificate
Registrar may treat the person in whose name any Certificate is registered as
the owner of such Certificate for the purpose of receiving remittances pursuant
to Section 8.01 and for all other purposes whatsoever, and none of the Servicer,
the Seller, the Trustee, the Certificate Registrar, the Paying Agent or any
agent of the Servicer, the Seller, the Trustee, the Paying Agent or the
Certificate Registrar shall be affected by notice to the contrary.
SECTION 9.06 Access to List of Certificateholders' Names and Addresses.
---------------------------------------------------------
The Certificate Registrar will furnish to the Trustee and the Servicer,
within five days after receipt by the Certificate Registrar of a request
therefor from the Trustee in writing, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Certificateholders as of
the most recent Record Date. If Holders of Certificates evidencing, as to any
Class, Percentage Interests representing 25% or more (hereinafter referred to as
"Applicants") apply in writing to the Trustee, and such application states that
the Applicants desire to communicate with other Certificateholders with respect
to their rights under this Agreement or under the Certificates and is
accompanied by a copy of the communication which such Applicants propose to
transmit, then the Trustee shall, within five Business Days after the receipt of
such application, afford such Applicants access during normal business hours to
the most recent list of Certificateholders held by the Trustee. If such list is
as of a date more than 90 days prior to the date of receipt of such Applicants'
request, the Trustee shall promptly request from the Certificate Registrar a
current list as provided above, and shall afford such Applicants access to such
list promptly upon receipt. Every Certificateholder, by receiving and holding a
Certificate, agrees with the Certificate Registrar and the Trustee that none of
the Originator, the Certificate Registrar or the Trustee shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the Certificateholders hereunder, regardless of the source from
which such information was derived.
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SECTION 9.07 Authenticating Agents.
---------------------
The Trustee may appoint one or more Authenticating Agents with power to act
on its behalf and subject to its direction in the execution and delivery of the
Certificates. For all purposes of this Agreement, the execution and delivery of
Certificates by the Authenticating Agent pursuant to this Section shall be
deemed to be the execution and delivery of Certificates "by the Trustee."
9-7
ARTICLE X
INDEMNITIES
-----------
SECTION 10.01 Seller's and Originator's Indemnities.
-------------------------------------
The Seller and Originator will jointly and severally defend and indemnify
the Trust, the Trustee (including the Custodian, the Paying Agent and any other
agents of the Trustee) and the Certificateholders against any and all costs,
expenses, losses, damages, claims and liabilities, including reasonable fees and
expenses of counsel and expenses of litigation of any third-party claims (i)
arising out of or resulting from the origination of any Contract (including but
not limited to truth in lending requirements) or the servicing of such Contract
prior to its transfer to the Trust (but only to the extent such cost, expense,
loss, damage, claim or liability is not provided for by the Originator's
repurchase of such Contract pursuant to Section 3.06) or (ii) arising out of or
resulting from the use or ownership of any Manufactured Homes by the Originator
or the Servicer or any Affiliate of either. Notwithstanding any other provision
of this Agreement, the obligation of the Originator under this Section shall not
terminate upon a Service Transfer pursuant to Article VII, except that the
obligation of the Originator under this Section shall not relate to the actions
of any subsequent Servicer after a Service Transfer.
SECTION 10.02 Liabilities to Obligors.
-----------------------
No obligation or liability to any Obligor under any of the Contracts is
intended to be assumed by the Trust or the Certificateholders under or as a
result of this Agreement and the transactions contemplated hereby and, to the
maximum extent permitted and valid under mandatory provisions of law, the Trust
and the Certificateholders expressly disclaim such assumption.
SECTION 10.03 Tax Indemnification.
-------------------
The Originator agrees to pay, and to indemnify, defend and hold harmless
the Trust, the Trustee (including the Custodian, the Paying Agent and any other
capacities of or agents of the Trustee) and the Certificateholders from, any
taxes which may at any time be asserted with respect to, and as of the date of,
the transfer of the Contracts to the Trust, including, without limitation, any
sales, gross receipts, general corporation, personal property, privilege or
license taxes (but not including any federal, state or other taxes arising out
of the creation of the Trust and the issuance of the Certificates), any tax
imposed on the Trust as a result of the Originator's repurchase of any Contract
pursuant to Section 3.06(c), and costs, expenses and reasonable counsel fees in
defending against the same, whether arising by reason of the acts to be
performed by the Originator, the Seller, the Servicer or the Trustee under this
Agreement or imposed against the Trust, a Certificateholder or otherwise.
SECTION 10.04 Servicer's Indemnities.
----------------------
The Servicer shall defend and indemnify the Trust, the Trustee (including
the Custodian, the Paying Agent and any other capacities of or agents of the
Trustee) and the Certificateholders against any and all costs, expenses, losses,
damages, claims and liabilities, including reasonable fees and expenses of
counsel and expenses of litigation, in respect of any action taken or omitted
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to be taken by the Servicer with respect to any Contract. This indemnity shall
survive any Service Transfer (but the original Servicer's obligations under this
Section 10.04 shall not relate to any actions of any subsequent Servicer after a
Service Transfer) and any payment of the amount owing under, or any repurchase
by the Originator of, any such Contract.
SECTION 10.05 Operation of Indemnities.
------------------------
Indemnification under this Article shall include, without limitation,
reasonable fees and expenses of counsel and expenses of litigation. If the
Originator or the Servicer has made any indemnity payments to the Trustee
pursuant to this Article and the Trustee thereafter collects any of such amounts
from others, the Trust will repay such amounts collected to the Originator or
the Servicer, as the case may be, without interest.
SECTION 10.06 REMIC Tax Matters.
-----------------
If a Class C Certificateholder, pursuant to Section 6.06, pays any taxes or
charges imposed upon the Subsidiary REMIC, Intermediate REMIC or Master REMIC,
as the case may be, as a REMIC or otherwise, such taxes or charges, except to
the extent set forth in the following proviso, shall be expenses and costs of
the Trust and the Class C Certificateholder shall be entitled to be reimbursed
therefor out of the Certificate Account as provided in Section 8.03; provided,
however, that any such taxes or charges shall not be expenses or costs of the
Trust, nor will the Class C Certificateholder be entitled to reimbursement
therefor out of the Certificate Account, if and to the extent that such taxes or
charges resulted from a failure by the Originator, the Trustee or any Servicer
to comply with the provisions of Section 2.04.
10-2
ARTICLE XI
THE TRUSTEE
-----------
SECTION 11.01 Duties of Trustee.
-----------------
The Trustee, prior to the occurrence of an Event of Termination and after
the curing of all Events of Termination which may have occurred, undertakes to
perform such duties and only such duties as are specifically set forth in this
Agreement. If an Event of Termination has occurred (which has not been cured),
the Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform as to form to the requirements of this Agreement.
Subject to Section 11.03, no provision of this Agreement shall be construed
to relieve the Trustee from liability for its own negligent action, its own
negligent failure to act or its own misconduct; provided, however, that:
a. Prior to the occurrence of an Event of Termination, and after the
curing of all such Events of Termination which may have occurred, the duties and
obligations of the Trustee shall be determined solely by the express provisions
of this Agreement, the Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this Agreement, no
implied covenants or obligations shall be read into this Agreement against the
Trustee and, in the absence of bad faith on the part of the Trustee, the Trustee
may conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or opinions furnished to
the Trustee and conforming to the requirements of this Agreement;
b. The Trustee shall not be liable for an error of judgment made in good
faith by a Responsible Officer of the Trustee, unless it shall be proved that
the Trustee was negligent in ascertaining the pertinent facts;
c. The Trustee shall not be personally liable with respect to any action
taken, suffered or omitted to be taken by it in good faith in accordance with
the direction of the Certificateholders with aggregate Percentage Interests
representing 25% or more of the Trust relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee, under this Agreement; and
d. The Trustee shall not be charged with knowledge of any event referred
to in Section 7.01 unless a Responsible Officer of the Trustee at the Corporate
Trust Office obtains actual knowledge of such event or the Trustee receives
written notice of such event from the Servicer or the Holders of Certificates
evidencing, as to any Class, Percentage Interests representing 25% or more.
11-1
None of the provisions contained in this Agreement shall in any event
require the Trustee to perform, or be responsible for the manner of performance
of, any of the obligations of the Originator, the Seller or the Servicer under
this Agreement, except during such time, if any, as the Trustee shall be the
successor to, and be vested with the rights, duties, powers and privileges of,
the Servicer in accordance with the terms of this Agreement. The Trustee shall
not be required to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if there is reasonable ground for believing that
the repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
SECTION 11.02 Certain Matters Affecting the Trustee.
-------------------------------------
Except as otherwise provided in Section 11.01:
a. The Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, Officer's Certificate, certificate of a
Servicing Officer, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal, bond or
other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
b. The Trustee may consult with counsel and any opinion of any counsel
for the Originator, the Seller or the Servicer shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted by it hereunder in good faith and in accordance with such Opinion of
Counsel;
c. The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Agreement, or to institute, conduct or defend any
litigation hereunder or in relation hereto, at the request, order or direction
of any of the Certificateholders, pursuant to the provisions of this Agreement,
unless such Certificateholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which may be
incurred therein or thereby; provided, however, that nothing contained herein
shall relieve the Trustee of the obligations, upon the occurrence of an Event of
Termination (which has not been cured), to exercise such of the rights and
powers vested in it by this Agreement, and to use the same degree of care and
skill in their exercise as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs;
d. Prior to the occurrence of an Event of Termination and after the
curing of all Events of Termination which may have occurred, the Trustee shall
not be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or document, unless
requested in writing so to do by Holders of Certificates evidencing, as to any
Class, Percentage Interests representing 25% or more; provided, however, that if
the payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is,
in the opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Agreement, the Trustee may require
reasonable indemnity against such cost, expense or liability as a condition to
so proceeding. The
11-2
reasonable expense of every such examination shall be paid by the Servicer or,
if paid by the Trustee, shall be reimbursed by the Servicer upon demand; and
e. The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or a custodian and shall not be liable for any acts or omissions of
such agents, attorneys or custodians if appointed by it with due care hereunder.
SECTION 11.03 Trustee Not Liable for Certificates or Contracts.
------------------------------------------------
The Trustee assumes no responsibility for the correctness of the recitals
contained herein or in the Certificates (other than the Trustee's execution
thereof). The Trustee makes no representations as to the validity or
sufficiency of this Agreement, of the Certificates (other than its execution
thereof) or of any Contract, Contract File, Land-and-Home Contract File or
related document. The Trustee shall not be accountable for the use or
application by the Servicer, the Originator or the Seller of funds paid to the
Originator or the Seller, as applicable, in consideration of conveyance of the
Contracts to the Trust by the Originator and the Seller or deposited into or
withdrawn from the Certificate Account by the Servicer.
SECTION 11.04 Rights of Certificateholders to Direct Trustee and to Waive
-----------------------------------------------------------
Event of Termination.
--------------------
Holders of Class A Certificates, Holders of Class M Certificates and
Holders of Class B Certificates evidencing, as to each such Class, Percentage
Interests representing 25% or more shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee; provided,
however, that, subject to Section 11.01, the Trustee shall have the right to
decline to follow any such direction if the Trustee being advised by counsel
determines that the action so directed may not lawfully be taken, or if the
Trustee in good faith shall, by a Responsible Officer or Officers of the
Trustee, determine that the proceedings so directed would be illegal or involve
it in personal liability or be unduly prejudicial to the rights of
Certificateholders not parties to such direction; and provided further that
nothing in this Agreement shall impair the right of the Trustee to take any
action deemed proper by the Trustee and which is not inconsistent with such
direction by the Certificateholders; and provided further that the Trustee shall
instead follow the directions of Holders of Class A Certificates, Holders of
Class M Certificates and Holders of Class B Certificates evidencing, as to each
such Class, Percentage Interests aggregating 51% or more whenever it receives
conflicting directions from Class A Certificateholders, Class M
Certificateholders and Class B Certificateholders. Holders of Class A
Certificates, Holders of Class M Certificates and Holders of Class B
Certificates evidencing, as to each such Class, Percentage Interests
representing 51% or more may on behalf of Certificateholders waive any past
Event of Termination hereunder and its consequences, except a default in respect
------
of a covenant or provision hereof which under Section 12.07 cannot be modified
or amended without the consent of all Certificateholders, and upon any such
waiver, such Event of Termination shall cease to exist and shall be deemed to
have been cured for every purpose of this Agreement; but no such waiver shall
extend to any subsequent or other Event of Termination or impair any right
consequent thereon. Following the Class M-2 Cross-Over Date, if all
distributions payable to the Class A Certificateholders and the Class M
Certificateholders have either been made or provided
11-3
for in accordance with this Agreement, then the Holders of Class B-1
Certificates may exercise the rights given to the Class A Certificateholders,
the Class M Certificateholders and Class B-1 Certificateholders under this
Section. Following the Class B-1 Cross-Over Date, if all distributions payable
to the Class A Certificateholders and the Class M Certificateholders have either
been made or provided for in accordance with this Agreement, then the Holders of
Class B-2 Certificates may exercise the rights given to the Class A
Certificateholders, the Class M Certificateholders and Class B-1
Certificateholders under this Section.
SECTION 11.05 The Servicer to Pay Trustee's Fees and Expenses.
-----------------------------------------------
The Servicer agrees:
a. to pay to the Trustee reasonable compensation for all services
rendered by it hereunder (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust)
including the services provided in connection with any auctions pursuant to
Section 8.05(e);
b. except as otherwise expressly provided herein, to reimburse the
Trustee, to the extent requested by the Trustee, for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any provision of this Agreement (including the reasonable compensation and the
expenses and disbursements of its agents and counsel, and reasonable
compensation expenses and disbursements in connection with any auctions pursuant
to Section 8.05(e)), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
c. to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of this
trust and its duties hereunder, including the costs and expenses of defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
All such payments by the Servicer shall be made from its own funds. The
covenants in this Section 11.05 shall be for the benefit of the Trustee in its
capacities as Trustee, Paying Agent, Custodian and Certificate Registrar
hereunder, and shall survive the termination of this Agreement.
SECTION 11.06 Eligibility Requirements for Trustee.
------------------------------------
The Trustee hereunder shall at all times be a financial institution
organized and doing business under the laws of the United States of America or
any State, authorized under such laws to exercise corporate trust powers and a
Title I approved lender pursuant to FHA Regulations, shall not be an Affiliate
of the Originator, and shall have a combined capital and surplus of at least
$50,000,000 or shall be a member of a bank holding system the aggregate combined
capital and surplus of which is $50,000,000, provided that the Trustee's
separate capital and surplus shall at all times be at least the amount required
by Section 310(a)(2) of the Trust Indenture Act of 1939, as amended. If such
Person publishes reports of condition at least annually, pursuant to law or to
the requirements of a supervising or examining authority, then for the purposes
of this Section 11.06, the combined capital and surplus of such Person shall be
deemed to be its
11-4
combined capital and surplus as set forth in its most recent report of condition
so published. In addition, the Trustee shall at all times have a long-term
deposit rating (or, if the Trustee is a wholly owned subsidiary of a bank
holding company system and not rated, the bank holding company shall have a
long-term senior unsecured debt rating) from Standard & Poor's of at least BBB,
or as shall be otherwise acceptable to Standard & Poor's, and a rating from
▇▇▇▇▇'▇ (if rated by ▇▇▇▇▇'▇) of at least Baa3, or as shall be otherwise
acceptable to ▇▇▇▇▇'▇ and Fitch. In case at any time the Trustee shall cease to
be eligible in accordance with the provisions of this Section 11.06, the Trustee
shall resign immediately in the manner and with the effect specified in Section
11.07.
SECTION 11.07 Resignation or Removal of Trustee.
---------------------------------
The Trustee may at any time resign and be discharged from the trusts hereby
created by giving written notice thereof to the Servicer and the Originator. A
copy of any such notice shall be sent to Standard & Poor's, ▇▇▇▇▇'▇ and Fitch.
Upon receiving such notice of resignation, the Originator shall promptly appoint
a successor Trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to each of the Servicer and the Originator and one
copy to the successor Trustee. If no successor Trustee shall have been so
appointed and shall have accepted appointment within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
If at any time the Trustee shall cease to be eligible in accordance with
the provisions of Section 11.06 and shall fail to resign after written request
therefor by the Originator, or if at any time the Trustee shall be legally
unable to act, or shall be adjudged a bankrupt or insolvent, or a receiver of
the Trustee or of its property shall be appointed, or any public officer shall
take charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, then the Originator may
remove the Trustee. If the Originator shall have removed the Trustee under the
authority of the immediately preceding sentence, the Originator shall promptly
appoint a successor Trustee by written instrument, in duplicate, one copy of
which instrument shall be delivered to the Trustee so removed and one copy to
the successor Trustee.
Any resignation or removal of the Trustee and appointment of a successor
Trustee pursuant to any of the provisions of this Section 11.07 shall not become
effective until acceptance of appointment by the successor Trustee as provided
in Section 11.08.
SECTION 11.08 Successor Trustee.
-----------------
Any successor Trustee appointed as provided in Section 11.07 shall execute,
acknowledge and deliver to the Servicer, the Originator and to its predecessor
Trustee an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor Trustee shall become effective and
such successor Trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with like effect as if originally named as Trustee. The
predecessor Trustee shall deliver or cause to be delivered to the successor
Trustee the Contracts, Contract Files and Land-and-Home Contract Files and any
related documents and statements
11-5
held by it hereunder; and, if the Land-and-Home Contract Files are then held by
a custodian pursuant to a custodial agreement, the predecessor Trustee and the
custodian shall amend such custodial agreement to make the successor Trustee the
successor to the predecessor Trustee thereunder; and the Servicer, the
Originator and the predecessor Trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for fully and
certainly vesting and confirming in the successor Trustee all such rights,
powers, duties and obligations.
No successor Trustee shall accept appointment as provided in this Section
11.08 unless at the time of such acceptance such successor Trustee shall be
eligible under the provisions of Section 11.06.
Upon acceptance of appointment by a successor Trustee as provided in this
Section 11.08, the Servicer shall cause notice of the succession of such Trustee
hereunder to be mailed to each Certificateholder at their addresses as shown in
the Certificate Register. If the Servicer fails to mail such notice within ten
days after acceptance of appointment by the successor Trustee, the successor
Trustee shall cause such notice to be mailed at the expense of the Servicer.
SECTION 11.09 Merger or Consolidation of Trustee.
----------------------------------
Any Person into which the Trustee may be merged or converted or with which
it may be consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person succeeding to
the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided such Person shall be eligible under the provisions
of Section 11.06, without the execution or filing of any paper or any further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding. The Trustee shall promptly notify Standard & Poor's, ▇▇▇▇▇'▇
and Fitch in the event it is a party to any merger, conversion or consolidation.
SECTION 11.10 Tax Returns.
-----------
Upon the Servicer's request, the Trustee will furnish the Servicer with all
such information as the Servicer may reasonably require in connection with
preparing all tax returns of the Subsidiary REMIC and the Master REMIC and the
Trustee shall execute such returns.
SECTION 11.11 Obligor Claims.
--------------
In connection with any offset defenses, or affirmative claims for recovery,
asserted in legal actions brought by Obligors under one or more Contracts based
upon provisions therein complying with, or upon other rights or remedies arising
from, any legal requirements applicable to the Contracts, including, without
limitation, the Federal Trade Commission's Trade Regulation Rule Concerning
Preservation of Consumers' Claims and Defenses (16 C.F.R. (S) 433) as amended
from time to time:
a. The Trustee is not, and shall not be deemed to be, either in any
individual capacity, as trustee hereunder or otherwise, a creditor, or a joint
venturer with or an Affiliate of, or acting in concert or cooperation with, any
seller of home improvements, in the arrangement, origination or making of
Contracts. The Trustee is the holder of the Contracts only as trustee on behalf
of the Certificateholders, and not as a principal or in any individual or
personal capacity;
11-6
b. The Trustee shall not be personally liable for or obligated to pay
Obligors any affirmative claims asserted thereby, or responsible to
Certificateholders for any offset defense amounts applied against Contract
payments, pursuant to such legal actions;
c. The Trustee will pay, solely from available Trust monies, affirmative
claims for recovery by Obligors only pursuant to final judicial orders or
judgments, or judicially approved settlement agreements, resulting from such
legal actions;
d. The Trustee will comply with judicial orders and judgments which
require its actions or cooperation in connection with Obligors' legal actions to
recover affirmative claims against Certificateholders.
e. The Trustee will cooperate with and assist Certificateholders in their
defense of legal actions by Obligors to recover affirmative claims if such
cooperation and assistance is not contrary to the interests of the Trustee as a
party to such legal actions and if the Trustee is satisfactorily indemnified for
all liability, costs and expenses arising therefrom; and
f. The Originator hereby agrees to indemnify, hold harmless and defend
the Trustee, Certificateholders from and against any and all liability, loss,
costs and expenses of the Trustee, Certificateholders resulting from any
affirmative claims for recovery asserted or collected by Obligors under the
Contracts. Notwithstanding any other provision of this Agreement, the
obligation of the Originator under this Section 11.11(f) shall not terminate
upon a Service Transfer pursuant to Article VII.
SECTION 11.12 Appointment of Co-Trustee or Separate Trustee.
---------------------------------------------
The Servicer shall have the power from time to time to appoint one or more
persons or corporations to act either as co-trustees jointly with the Trustee,
or as separate trustees, or as custodians, for the purpose of conforming to any
legal requirement, restriction or condition (i) with respect to the holding of
the Contracts, the Contract Files and the Land-and-Home Contract Files or (ii)
with respect to the enforcement of a Contract in any state in which a
Manufactured Home is located or in any state in which any portion of the Trust
is located. The separate trustees, co-trustees, or custodians so appointed shall
be trustees or custodians for the benefit of all Certificateholders and shall,
subject to the provisions of the following paragraph, have such powers, rights
and remedies as shall be specified in the instrument of appointment; provided,
however, that no such appointment shall, or shall be deemed to, constitute the
appointee an agent of the Trustee.
Every separate trustee, co-trustee and custodian shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(A) all powers, duties, obligations and rights conferred upon the
Trustee in respect of the receipt, custody and payment of monies shall be
exercised solely by the Trustee;
(B) all other rights, powers, duties and obligations conferred or
imposed upon the Trustee, to the extent also imposed upon such separate
trustees, co-trustees or custodians, shall be conferred or imposed upon and
exercised or performed by the
11-7
Trustee and such separate trustee, co-trustee, or custodian jointly, except
to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed, the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including holding of the Trust or
any portion thereof in any such jurisdiction) shall be exercised and
performed by such separate trustee, co-trustee, or custodian;
(C) no separate trustee, co-trustee or custodian hereunder shall be
personally liable by reason of any act or omission of any other separate
trustee, co-trustee or custodian hereunder; and
(D) the Servicer may at any time accept the resignation of or remove
any separate trustee, co-trustee or custodian, so appointed by it.
If any separate trustee, co-trustee or custodian shall die, become
incapable of acting, resign or be removed, all of its estates, properties,
rights, remedies and trusts shall vest in and be exercised by the Trustee, to
the extent permitted by law, without the appointment of a new or successor
trustee or custodian. The reasonable fees and expenses of any such separate
trustee, co-trustee or custodian shall be treated as additional fees and
expenses of the Trustee subject to Section 11.05 and payable by the Servicer if
and only to the extent the Servicer shall have consented in writing to his or
its appointment, which consent shall not be unreasonably withheld.
SECTION 11.13 Agents of Trustee.
-----------------
To the extent not prohibited by law and not inconsistent with the terms of
this Agreement (including, without limitation, Section 11.12), the Trustee may,
with the prior consent of the Servicer, appoint one or more agents to carry out
ministerial matters on behalf of the Trustee under this Agreement.
11-8
ARTICLE XII
-----------
MISCELLANEOUS
-------------
SECTION 12.01 Servicer Not to Assign Duties or Resign; Delegation of
------------------------------------------------------
Servicing Functions.
-------------------
The Servicer may not sell or assign its rights and duties as Servicer
hereunder, except as expressly provided for herein, provided that the Servicer
may pledge or assign the right to receive all or any portion of the Monthly
Servicing Fee payable to it. The Servicer shall not resign from the obligations
and duties hereby imposed on it except upon determination that the performance
of its duties hereunder is no longer permissible under applicable law or is in
material conflict by reason of applicable law with any other activities carried
on by it. Any such determination permitting the resignation of the Servicer
shall be evidenced by an Opinion of Counsel for the Servicer to such effect
addressed and delivered to the Trustee. No such resignation shall become
effective until the Trustee or a successor servicer shall have assumed the
responsibilities and obligations of the Servicer in accordance with Sections
7.02 and 7.03.
Notwithstanding the foregoing:
a. Any Person into which the Servicer may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Servicer shall be a party, or any Person succeeding to the business of the
Servicer, shall be the successor of the Servicer hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding; provided,
however, that the successor or surviving Person to the Servicer shall satisfy
the criteria set forth in the definition of an Eligible Servicer. The Servicer
shall promptly notify Standard & Poor's, ▇▇▇▇▇'▇ and Fitch of any such merger to
which it is a party.
b. Any Person acquiring all or substantially all of the manufactured
housing division of Conseco Finance Corp., who assumes all of the obligations of
the Servicer hereunder and who satisfies the criteria set forth in the
definition of "Eligible Servicer," shall become the Servicer hereunder. The
Servicer shall promptly notify Standard & Poor's, ▇▇▇▇▇'▇ and Fitch of any such
acquisition.
c. Conseco Finance Corp., if it is the Servicer, may delegate some or all
of its servicing duties to a wholly owned subsidiary of Conseco Finance Corp.,
for so long as said subsidiary remains, directly or indirectly, a wholly owned
subsidiary of Conseco Finance Corp. Notwithstanding any such delegation,
Conseco Finance Corp. shall retain all of the rights and obligations of the
Servicer hereunder.
SECTION 12.02 Maintenance of Office or Agency.
-------------------------------
The Trustee will maintain in St. ▇▇▇▇, Minnesota, an office or agency where
Certificates may be surrendered for registration of transfer or exchange and
where notices and demands to or upon the Trustee in respect of the Certificates
and this Agreement may be served. On the date hereof the Trustee's office for
such purposes is located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇. The Trustee will give prompt written notice
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to Certificateholders of any change in the location of the Certificate Register
or any such office or agency.
SECTION 12.03 Termination.
-----------
a. This Agreement, the Trust and each of the Subsidiary REMIC,
Intermediate REMIC and Master REMIC shall terminate (after distribution of all
amounts due to Certificateholders pursuant to Sections 8.01 and 8.03) on the
earlier of (a) the Remittance Date on which the Pool Scheduled Principal Balance
is reduced to zero and all amounts payable to Certificateholders on such
Remittance Date have been distributed to Certificateholders or (b) the
Remittance Date on which a sale of the Contracts occurs pursuant to Section
8.05; provided, that in no event shall the trust created hereby continue beyond
the expiration of 21 years from the death of the last survivor of the
descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late Ambassador of the United States to
the Court of St. ▇▇▇▇▇, living on the date hereof; and provided further, that
the Servicer's and the Originator's representations and warranties and
indemnities by the Originator and the Servicer shall survive termination.
b. Any termination of the Master REMIC, Intermediate REMIC or Subsidiary
REMIC must be conducted so as to qualify as a "qualified liquidation" of such
REMIC within the meaning of the REMIC Provisions. The Trustee's acknowledgment
of a notice given under Section 8.05(b) or acceptance of a bid meeting the
conditions of Section 8.05(e) shall constitute a plan of complete liquidation of
the Subsidiary REMIC, the Intermediate REMIC and the Master REMIC within the
meaning of Section 860F of the Code. Each Certificateholder hereby irrevocably
approves and appoints the Trustee as its attorney-in-fact for the purposes of
adoption of the plan of complete liquidation.
c. Notice of any termination, specifying the Final Remittance Date (which
shall be a date that would otherwise be a Remittance Date) upon which all
Certificateholders may surrender their Certificates to the Trustee for payment
of the final distribution and cancellation, shall be given promptly by the
Trustee (upon direction by the Servicer ten days prior to the date such notice
is to be mailed) by letter to the Certificate Registrar, the Rating Agencies and
the Certificateholders mailed no later than ten Business Days before the Final
Remittance Date specifying (1) the Final Remittance Date upon which final
payment on the Certificates will be made upon presentation and surrender of
Certificates at the office or agency of the Trustee therein designated; (2) the
amount of any such final payment; and (3) that the Record Date otherwise
applicable to such Remittance Date is not applicable, payments being made only
upon presentation and surrender of the Certificates at the office or agency of
the Trustee therein specified. Each such notice shall, to the extent required by
the REMIC Provisions or other applicable law, be signed on behalf of the Trust
and each of the Subsidiary REMIC, Intermediate REMIC and Master REMIC by the
Trustee.
d. On the Final Remittance Date, upon presentation and surrender of the
Certificates, the Trustee shall cause to be distributed from the Certificate
Account, in the following order of priority, to Certificateholders on the Final
Remittance Date in proportion to their respective Percentage Interests an amount
equal to (i) as to Class A Certificates, the Class A Principal Balance, together
with any Unpaid Class A Interest Shortfall and one month's interest at the
related Remittance Rate on the related Class Principal Balance (or Class A-IO
Notional Principal
12-2
Balance), respectively (calculated in the manner specified in Section 1.03),
(ii) as to Class M-1 Certificates, the Class M-1 Principal Balance together with
any Unpaid Class M-1 Interest Shortfall, any Unpaid Class M-1 Liquidation Loss
Interest Shortfall and one month's interest at the Class M-1 Remittance Rate on
the Class M-1 Principal Balance, (iii) as to Class M-2 Certificates, the Class
M-2 Principal Balance together with any Unpaid Class M-2 Interest Shortfall, any
Unpaid Class M-2 Liquidation Loss Interest Shortfall and one month's interest at
the Class M-2 Remittance Rate on the Class M-2 Principal Balance, (iv) as to
Class B-1 Certificates, the Class B-1 Principal Balance together with any Unpaid
Class B-1 Interest Shortfall, any Unpaid Class B-1 Liquidation Loss Interest
Shortfall and one month's interest at the Class B-1 Remittance Rate on the Class
B-1 Principal Balance, (v) as to Class B-2 Certificates, the Class B-2 Principal
Balance together with any Unpaid Class B-2 Interest Shortfall and one month's
interest at the Class B-2 Remittance Rate on the Class B-2 Principal Balance,
(vi) as to Class B-3I Certificates, the Class B-3I Distribution Amount for that
Remittance Date, and to the Class C Master Certificate, the amount which remains
on deposit in the Certificate Account (other than amounts retained to meet
claims) after application pursuant to clauses (i)-(viii) above; provided,
however, that if the Final Remittance Date occurs as a result of the sale of the
Contracts pursuant to Section 8.05, the amount so distributed to the
Certificateholders shall not exceed the Minimum Purchase Price or Minimum
Auction Price, as applicable, and any balance shall be paid to the purchaser of
the Contracts. The distribution on the Final Remittance Date shall be in lieu of
the distribution otherwise required to be made on such Remittance Date in
respect of each Class of Certificates.
e. In the event that all of the Certificateholders do not surrender their
Certificates for cancellation within three months after the time specified in
the above-mentioned written notice, the Originator shall give a second written
notice to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
three months after the second notice all the Certificates shall not have been
surrendered for cancellation, the Originator shall transfer to itself all
amounts remaining on deposit in the Certificate Account, to hold in trust for
Certificateholders who have not surrendered their Certificates for cancellation,
together with the final record list of Certificateholders, and the Originator
shall take appropriate steps, or may appoint an agent to take appropriate steps,
to contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets which remain in trust hereunder.
SECTION 12.04 Acts of Certificateholders.
--------------------------
a. Except as otherwise specifically provided herein, whenever
Certificateholder approval, authorization, direction, notice, consent, waiver or
other action is required hereunder, such approval, authorization, direction,
notice, consent, waiver or other action shall be deemed to have been given or
taken on behalf of, and shall be binding upon, all Certificateholders if agreed
to by Holders of Certificates of the specified Class or Classes evidencing, as
to each such Class, Percentage Interests aggregating 51% or more.
b. Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement to be given or taken by
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or by
agent duly appointed in writing; and except as herein
12-3
otherwise expressly provided, such action shall become effective when such
instrument or instruments are delivered to the Trustee and, where required, to
the Servicer. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Agreement
and (subject to Section 11.01) conclusive in favor of the Trustee, the Servicer
and the Originator if made in the manner provided in this Section.
c. The fact and date of the execution by any Certificateholder of any
such instrument or writing may be proved in any reasonable manner which the
Trustee deems sufficient.
d. The ownership of Certificates shall be proved by the Certificate
Register.
e. Any request, demand, authorization, direction, notice, consent, waiver
or other act by a Certificateholder shall bind every holder of every Certificate
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof, in respect of anything done, or omitted to be done by the Trustee,
the Servicer or the Originator in reliance thereon, whether or not notation of
such action is made upon such Certificate.
f. The Trustee may require such additional proof of any matter referred
to in this Section as it shall deem necessary.
SECTION 12.05 Calculations.
------------
Except as otherwise provided in Section 1.03, all interest rate and basis
point calculations under this Agreement will be made on the basis of a 360-day
year and twelve 30-day months and will be carried out to at least three decimal
places.
SECTION 12.06 Assignment or Delegation by Originator.
--------------------------------------
Except as specifically authorized hereunder, and except for its obligations
as Servicer which are dealt with under Article V and Article VII, the Originator
may not convey and assign or delegate any of its rights or obligations hereunder
absent the prior written consent of Holders of Certificates of each Class
evidencing, as to each such Class, Percentage Interests aggregating 66 2/3% or
more, and any attempt to do so without such consent shall be void. It is
understood that the foregoing does not prohibit the pledge or assignment by the
Originator of any right to payment pursuant to Article VIII.
Notwithstanding the foregoing, any person into which the Originator may be
merged or consolidated, or any corporation resulting from any merger, conversion
or consolidation to which the Originator shall be a party, or any Person
succeeding to the business of the Originator, shall be the successor of the
Originator hereunder, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding. The Originator shall promptly notify Standard &
Poor's, ▇▇▇▇▇'▇ and Fitch of any such merger to which it is a party.
SECTION 12.07 Amendment.
---------
a. This Agreement may be amended from time to time by the Originator, the
Servicer and the Trustee, without the consent of any of the Certificateholders,
to correct manifest
12-4
error, to cure any ambiguity, to correct or supplement any provisions herein
which may be inconsistent with any other provisions herein, as the case may be,
to make such changes as are necessary to maintain the status of each of the
Subsidiary REMIC, Intermediate REMIC and Master REMIC as a "real estate mortgage
investment conduit" under the REMIC Provisions of the Code or to otherwise
effectuate the benefits of such status to the Subsidiary REMIC, Intermediate
REMIC, Master REMIC and the Certificateholders, including, without limitation,
to implement any provision permitted by law that would enable a REMIC to avoid
the imposition of any tax, to add or amend any provision as required by Standard
& Poor's, ▇▇▇▇▇'▇, Fitch or any other nationally recognized statistical rating
organization in order to improve or maintain the rating of any Class of Class A
Certificates, Class M Certificates or Class B Certificates, or to make any other
provisions with respect to matters or questions arising under this Agreement
that shall not be inconsistent with the provisions of this Agreement; provided,
however, that such action shall not, as evidenced by an Opinion of Counsel for
the Originator, adversely affect in any material respect the interests of any
Certificateholder.
b. This Agreement may also be amended from time to time by the Servicer,
the Originator and the Trustee, with the consent of Holders of Certificates of
each Class affected thereby evidencing, as to each such Class, Percentage
Interests aggregating 51% or more, for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this Agreement
or of modifying in any manner the rights of the Certificateholders; provided,
however, that no such amendment shall (a) reduce in any manner the amount of, or
delay the timing of, collections of payments on the Contracts or distributions
which are required to be made on any Certificate, (b) reduce the aforesaid
percentage required to consent to any such amendment, without the consent of the
holders of all Certificates then outstanding, (c) result in the disqualification
of the Subsidiary REMIC, Intermediate REMIC or Master REMIC as a REMIC under the
Code, (d) adversely affect the status of the Subsidiary REMIC, Intermediate
REMIC or Master REMIC as a REMIC or the status of the Regular Certificates as
"regular interests" in the Master REMIC or (e) cause any tax (other than any tax
imposed on "net income from foreclosure property" under Section 860G(c)(1) of
the Code that would be imposed without regard to such amendment) to be imposed
on the Trust, including, without limitation, any tax imposed on "prohibited
transactions" under Section 860F(a)(1) of the Code or on "contributions after
the startup date" under Section 860G(d)(1) of the Code. This Agreement may not
be amended without the consent of all Class C Certificateholders for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement which would modify in any manner the rights of the
Class C Certificateholders.
c. This Agreement shall not be amended under this Section without the
consent of 100% of Certificateholders if such amendment would result in the
disqualification of the Subsidiary REMIC, Intermediate REMIC or Master REMIC as
a REMIC under the Code.
d. Concurrently with the solicitation of any consent pursuant to this
Section 12.07, the Trustee shall furnish written notification to the Rating
Agencies of such solicitation. Promptly after the execution of any amendment
pursuant to this Section 12.07, the Trustee shall furnish written notification
of the substance of such amendment to the Rating Agencies and each
Certificateholder.
12-5
e. It shall not be necessary for the consent of Certificateholders under
this Section 12.07 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
requirements as the Trustee may prescribe.
f. The Trustee may, but shall not be obligated to, enter into any such
amendment which affects the Trustee's own rights, duties or immunities under
this Agreement or otherwise.
g. In connection with any amendment pursuant to this Section, the Trustee
shall be entitled to receive an unqualified Opinion of Counsel to the Servicer
to the effect that such amendment is authorized or permitted by the Agreement.
h. In the absence of the consent described in subsection (c) of this
Section, in connection with any amendment pursuant to this Section, the Trustee
shall have received an unqualified Opinion of Counsel, the expense of which
shall not be an expense of the Trust, stating that any such amendment (i) will
not adversely affect the status of the Subsidiary REMIC, Intermediate REMIC or
Master REMIC as a REMIC or the status of the Regular Certificates as "regular
interests" in the Master REMIC, and (ii) will not cause any tax (other than any
tax imposed on "net income from foreclosure property" under Section 860G(c)(1)
of the Code that would be imposed without regard to such amendment) to be
imposed on the Trust, including, without limitation, any tax imposed on
"prohibited transactions" under Section 860F(a)(1) of the Code or on
"contributions after the startup date" under Section 860G(d)(1) of the Code.
i. Upon the execution of any amendment or consent pursuant to this
Section 12.07, this Agreement shall be modified in accordance therewith, and
such amendment or consent shall form a part of this Agreement for all purposes,
and every Certificateholder hereunder shall be bound thereby.
SECTION 12.08 Notices.
-------
All communications and notices pursuant hereto to the Servicer, the
Originator and the Trustee shall be in writing and delivered or mailed to it at
the appropriate following address:
If to the Seller:
Conseco Finance Securitizations Corp.
300 Landmark Towers
▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
12-6
If to the Originator or Servicer:
Conseco Finance Corp.
1100 Landmark Towers
▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Trustee:
U.S. Bank National Association
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
If to Standard & Poor's:
Standard & Poor's Rating Services,
a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Asset Backed Securities
Surveillance Group
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
If to Fitch:
Fitch, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
If to Moody's:
▇▇▇▇▇'▇ Investors Service, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Structured Financing, Manufactured Housing
Surveillance Group
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address as the party may designate by notice to the other
parties hereto, which notice shall be effective when received.
All communications and notices pursuant hereto to a Certificateholder shall
be in writing and delivered or mailed at the address shown in the Certificate
Register.
12-7
SECTION 12.09 Merger and Integration.
----------------------
Except as specifically stated otherwise herein, this Agreement sets forth
the entire understanding of the parties relating to the subject matter hereof,
and all prior understandings, written or oral, are superseded by this Agreement.
This Agreement may not be modified, amended, waived or supplemented except as
provided herein.
SECTION 12.10 Headings.
--------
The headings herein are for purposes of reference only and shall not
otherwise affect the meaning or interpretation of any provision hereof.
SECTION 12.11 Governing Law.
-------------
This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of Minnesota.
12-8
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized this 29th
day of March, 2001.
CONSECO FINANCE CORP.
By____________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Vice President and Assistant Treasurer
CONSECO FINANCE SECURITIZATIONS CORP.
By____________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Vice President and Assistant Treasurer
U.S. BANK NATIONAL ASSOCIATION
not in its individual capacity but
solely as Trustee
By____________________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇
Vice President
12-9
EXHIBIT A-1
-----------
FORM OF CLASS A CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE.
Class A-[1A][1B][2][3][4][5] No.
(Senior)
Cut-off Date: as defined in the Remittance Rate: [Floating rate equal to the
Pooling and Servicing Agreement lesser of (a) one-month LIBOR plus 0.13% and
Dated as of ▇▇▇▇▇ ▇, ▇▇▇▇ (▇) the Adjusted Weighted Average Contract
Rate] [_____%] [Floating Rate equal to the
First Remittance Date: lesser of (a) 6.990% (or, on each Remittance
May 1, 2001 Date after the first Remittance Date on which
the Pool Scheduled Principal Balance is equal
Servicer: to or less than 20% of the Cut-off Date Pool
Conseco Finance Corp. Principal Balance, 7.490%) and (b) the
Adjusted Weighted Average Contract Rate]
Denomination:
Aggregate Denomination of
All Class A-[1A][1B][2][3][4][5]
Certificates: $__________
Maturity Date: July 1, 2032
(or if such day is not a
Business Day, then the next
Succeeding Business Day)
CUSIP: _____
A-1-1
MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE PASS-THROUGH CERTIFICATES,
SERIES 2001-1, CLASS A-[1A][1B][2][3][4][5](SENIOR)
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
CONSECO FINANCE CORP. OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT SET FORTH
IN THE AGREEMENT.
This certifies that Cede & Co. is the registered owner of the undivided
Percentage Interest represented by the original principal amount set forth above
in Manufactured Housing Contract Senior/Subordinate Pass-Through Certificate
Trust 2001-1 (the "Trust"), which includes among its assets a pool of
manufactured housing installment sale contracts and installment loan agreements
(including, without limitation, all related security interests and any and all
rights to receive payments which are due pursuant thereto after the applicable
Cut-off Date. The Trust has been created pursuant to a Pooling and Servicing
Agreement (the "Agreement"), dated as of March 1, 2001, among Conseco Finance
Corp., as Originator and Servicer (the "Originator"), Conseco Finance
Securitizations Corp., as Seller (the "Seller"), and U.S. Bank National
Association, as Trustee of the Trust (the "Trustee"). This Certificate is one
of the Certificates described in the Agreement and is issued pursuant and
subject to the Agreement. By acceptance of this Certificate the holder assents
to and becomes bound by the Agreement. To the extent not defined herein, all
capitalized terms have the meanings assigned to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on the first day
(or if such day is not a Business Day, the next succeeding Business Day) (the
"Remittance Date") of each month commencing in May 2001, so long as the
Agreement has not been terminated, by check (or, if such Certificateholder holds
a Class of Class A Certificates with an aggregate Percentage Interest of at
least 5% and so desires, by wire transfer pursuant to instructions delivered to
the Trustee at least 10 days prior to such Remittance Date) to the registered
Certificateholder at the address appearing on the Certificate Register as of the
Business Day immediately preceding such Remittance Date, in an amount equal to
the Certificateholder's Percentage Interest of the portion of the Class A
Distribution Amount to be distributed to such Class of Class A Certificates.
The Maturity Date of this Certificate is July 1, 2032 or the next succeeding
Business Day if such July 1 is not a Business Day.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds in the Certificate Account to the extent
available for distribution to the Certificateholder as provided in the Agreement
for payment hereunder and that the Trustee in its individual capacity is not
personally liable to the Certificateholder for any amounts payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement. By acceptance of this
Certificate, the Certificateholder agrees to disclosure of his, her or its name
and address to other Certificateholders under the conditions specified in the
Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for information with respect to the interests, rights,
benefits, obligations, proceeds
A-1-2
and duties evidenced hereby and the rights, duties and immunities of the
Trustee. Copies of the Agreement and all amendments thereto will be provided to
any Certificateholder free of charge upon a written request to the Trustee.
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trustee in
St. ▇▇▇▇, Minnesota, accompanied by a written instrument of transfer in form
satisfactory to the Trustee and the Certificate Registrar duly executed by the
holder thereof or his or her attorney duly authorized in writing, and thereupon
one or more new Certificates evidencing the same aggregate Percentage Interest
will be issued to the designated transferee or transferees.
[Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC") to Issuer or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]
The Originator, the Seller, the Servicer, the Trustee, the Paying Agent and
the Certificate Registrar and any agent of the Originator, the Seller, the
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Originator, the Seller, the Servicer, the Trustee,
the Paying Agent, the Certificate Registrar nor any such agent shall be affected
by any notice to the contrary.
A-1-3
IN WITNESS WHEREOF, Manufactured Housing Contract Senior/ Subordinate Pass-
Through Certificate Trust 2001-1 has caused this Certificate to be duly executed
by the manual signature of a duly authorized officer of the Trustee.
Dated: MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE
PASS-THROUGH CERTIFICATE
TRUST 2001-1
By U.S. BANK NATIONAL ASSOCIATION
By_________________________________
Authorized Signatory
A-1-4
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ______________________________ the within Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificate and does hereby irrevocably
constitute and appoint ______________________________ Attorney to transfer the
said certificate on the Certificate Register maintained by the Trustee, with
full power of substitution in the premises.
Date: By_______________________
Signature
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
-----------
FORM OF CLASS A-IO CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE.
Class A-IO No.
(Senior)
Cut-off Date: as defined in the Remittance Rate: 2.500%
Pooling and Servicing Agreement
dated as of March 1, 2001 Denomination:
First Remittance Date: Aggregate Original Notional Principal Amount
May 1, 2001 of all Class A-IO Certificates: $120,000,000
Servicer: Maturity Date: July 1, 2032
Conseco Finance Corp. (or if such day is not a
Business Day, then the next
succeeding Business Day)
CUSIP: _____
MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE PASS-THROUGH CERTIFICATES,
SERIES 2001-1, CLASS A-IO (SENIOR)
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
CONSECO FINANCE CORP. OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT SET FORTH
IN THE AGREEMENT.
This certifies that Cede & Co. is the registered owner of the undivided
Percentage Interest represented by the original notional principal amount set
forth above in Manufactured Housing Contract Senior/Subordinate Pass-Through
Certificate Trust 2001-1 (the "Trust"), which includes among its assets a pool
of manufactured housing installment sale contracts and installment loan
agreements (including, without limitation, all related security interests and
any and all rights to receive payments which are due pursuant thereto after the
applicable Cut-off Date. The Trust has been created pursuant to a Pooling and
Servicing Agreement (the "Agreement"), dated as of March 1, 2001, among Conseco
Finance Corp., as Originator and
A-2-1
Servicer (the "Originator"), Conseco Finance Securitizations Corp., as Seller
(the "Seller"), and U.S. Bank National Association, as Trustee of the Trust (the
"Trustee"). This Certificate is one of the Certificates described in the
Agreement and is issued pursuant and subject to the Agreement. By acceptance of
this Certificate the holder assents to and becomes bound by the Agreement. To
the extent not defined herein, all capitalized terms have the meanings assigned
to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on the first day
(or if such day is not a Business Day, the next succeeding Business Day) (the
"Remittance Date") of each month commencing in May 2001, so long as the
Agreement has not been terminated, by check (or, if such Certificateholder holds
Class A-IO Certificates with an aggregate Percentage Interest of at least 5% and
so desires, by wire transfer pursuant to instructions delivered to the Trustee
at least 10 days prior to such Remittance Date) to the registered
Certificateholder at the address appearing on the Certificate Register as of the
Business Day immediately preceding such Remittance Date, in an amount equal to
the Certificateholder's Percentage Interest of the portion of the Class A
Distribution Amount to be distributed to the Class A-IO Certificates. The
Maturity Date of this Certificate is July 1, 2032 or the next succeeding
Business Day if such July 1 is not a Business Day.
THIS CERTIFICATE IS AN INTEREST-ONLY CERTIFICATE. THE HOLDER OF THE
CERTIFICATE SHALL NOT BE ENTITLED TO ANY DISTRIBUTIONS OF PRINCIPAL WITH RESPECT
TO THE CONTRACTS.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds in the Certificate Account to the extent
available for distribution to the Certificateholder as provided in the Agreement
for payment hereunder and that the Trustee in its individual capacity is not
personally liable to the Certificateholder for any amounts payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement. By acceptance of this
Certificate, the Certificateholder agrees to disclosure of his, her or its name
and address to other Certificateholders under the conditions specified in the
Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for information with respect to the interests, rights,
benefits, obligations, proceeds and duties evidenced hereby and the rights,
duties and immunities of the Trustee. Copies of the Agreement and all
amendments thereto will be provided to any Certificateholder free of charge upon
a written request to the Trustee.
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trustee in
St. ▇▇▇▇, Minnesota, accompanied by a written instrument of transfer in form
satisfactory to the Trustee and the Certificate Registrar duly executed by the
holder thereof or his or her attorney duly authorized in writing, and thereupon
one or more new Certificates evidencing the same aggregate Percentage Interest
will be issued to the designated transferee or transferees.
A-2-2
[Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC") to Issuer or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]
The Originator, the Seller, the Servicer, the Trustee, the Paying Agent and
the Certificate Registrar and any agent of the Originator, the Seller, the
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Originator, the Seller, the Servicer, the Trustee,
the Paying Agent, the Certificate Registrar nor any such agent shall be affected
by any notice to the contrary.
A-2-3
IN WITNESS WHEREOF, Manufactured Housing Contract Senior/ Subordinate Pass-
Through Certificate Trust 2001-1 has caused this Certificate to be duly executed
by the manual signature of a duly authorized officer of the Trustee.
Dated: MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE
PASS-THROUGH CERTIFICATE
TRUST 2001-1
By U.S. BANK NATIONAL ASSOCIATION
By______________________________________
Authorized Signatory
A-2-4
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ______________________________ the within Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificate and does hereby irrevocably
constitute and appoint ______________________________ Attorney to transfer the
said certificate on the Certificate Register maintained by the Trustee, with
full power of substitution in the premises.
Date: By______________________________
Signature
A-2-5
EXHIBIT B
---------
FORM OF CLASS M-[1][2] CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES [AND THE CLASS M-1 CERTIFICATES] AS DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
Class M-[1][2] No.
(Subordinate)
Cut-off Date: as defined in the Remittance Rate: Floating Rate
Pooling and Servicing Agreement equal to the Adjusted Weighted
dated as of March 1, 2001 Average Contract Rate (subject to a
maximum of ______%)
Denomination:
First Remittance Date: Aggregate Denomination of All Class
May 1, 2001 M-[1][2] Certificates: $___________
Servicer: Maturity Date: July 1, 2032
Conseco Finance Corp. (or if such day is not a Business
Day, then the next succeeding
Business Day)
CUSIP: _____
MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE PASS-THROUGH CERTIFICATES,
SERIES 2001-1, CLASS M-[1][2] (SUBORDINATE)
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN CONSECO
FINANCE CORP. OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT SET FORTH IN THE
AGREEMENT.
This certifies that Cede & Co. is the registered owner of the undivided
Percentage Interest represented by the original principal amount set forth above
in Manufactured Housing Contract Senior/Subordinate Pass-Through Certificate
Trust 2001-1 (the "Trust"), which includes among its assets a pool of
manufactured housing installment sale contracts and installment loan
B-1
agreements (including, without limitation, all related security interests and
any and all rights to receive payments which are due pursuant thereto after the
applicable Cut-off Date). The Trust has been created pursuant to a Pooling and
Servicing Agreement (the "Agreement"), dated as of March 1, 2001 among Conseco
Finance Corp., as Originator and Servicer (the "Originator"), Conseco Finance
Securitizations Corp., as Seller (the "Seller"), and U.S. Bank National
Association, as Trustee of the Trust (the "Trustee"). This Certificate is one of
the Certificates described in the Agreement and is issued pursuant and subject
to the Agreement. By acceptance of this Certificate the holder assents to and
becomes bound by the Agreement. To the extent not defined herein, all
capitalized terms have the meanings assigned to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on the first day
(or if such day is not a Business Day, the next succeeding Business Day) (the
"Remittance Date") of each month commencing in May 2001, so long as the
Agreement has not been terminated, by check (or, if such Certificateholder holds
a Class M-[1][2] Certificate with an aggregate Percentage Interest of at least
5% and so desires, by wire transfer pursuant to instructions delivered to the
Trustee at least 10 days prior to such Remittance Date) to the registered
Certificateholder at the address appearing on the Certificate Register as of the
Business Day immediately preceding such Remittance Date, in an amount equal to
the Certificateholder's Percentage Interest of the Class [M-1/M-2] Distribution
Amount for such Remittance Date. The Maturity Date of this Certificate is July
1, 2032 or the next succeeding Business Day if such July 1 is not a Business
Day.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds in the Certificate Account to the extent
available for distribution to the Certificateholder as provided in the Agreement
for payment hereunder and that the Trustee in its individual capacity is not
personally liable to the Certificateholder for any amounts payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement. By acceptance of this Certificate,
the Certificateholder agrees to disclosure of his, her or its name and address
to other Certificateholders under the conditions specified in the Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for information with respect to the interests, rights,
benefits, obligations, proceeds and duties evidenced hereby and the rights,
duties and immunities of the Trustee. Copies of the Agreement and all amendments
thereto will be provided to any Certificateholder free of charge upon a written
request to the Trustee.
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trustee in
St. ▇▇▇▇, Minnesota, accompanied by a written instrument of transfer in form
satisfactory to the Trustee and the Certificate Registrar duly executed by the
holder thereof or his or her attorney duly authorized in writing, and thereupon
one or more new Certificates evidencing the same aggregate Percentage Interest
will be issued to the designated transferee or transferees.
[Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC") to Issuer or its
agent for registration of
B-2
transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.]
The Originator, the Seller, the Servicer, the Trustee, the Paying Agent and
the Certificate Registrar and any agent of the Originator, the Seller, the
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Originator, the Seller, the Servicer, the Trustee,
the Paying Agent, the Certificate Registrar nor any such agent shall be affected
by any notice to the contrary.
B-3
IN WITNESS WHEREOF, Manufactured Housing Contract Senior/Subordinate Pass-
Through Certificate Trust 2001-1 has caused this Certificate to be duly executed
by the manual signature of a duly authorized officer of the Trustee.
Dated: MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE PASS-THROUGH
CERTIFICATE TRUST 2001-1
By U.S. BANK NATIONAL ASSOCIATION
By_________________________________
Authorized Signatory
B-4
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto _____________________________ the within Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificate and does hereby irrevocably
constitute and appoint _____________________________ Attorney to transfer the
said certificate on the Certificate Register maintained by the Trustee, with
full power of substitution in the premises.
Dated: By__________________________
Authorized Signatory
B-5
EXHIBIT C-1
-----------
FORM OF CLASS B-[1][2] CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES, THE CLASS M-1 CERTIFICATES [,] [AND] THE CLASS M-2 CERTIFICATES
[AND THE CLASS B-1 CERTIFICATES] AS DESCRIBED IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
[THIS CERTIFICATE MAY NOT BE RESOLD OR TRANSFERRED EXCEPT IN ACCORDANCE
WITH THE PROVISIONS OF SECTION 9.02 OF THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.]
[THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 9.02 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.]
Class B-[1][2] No.
(Subordinate)
Cut-off Date: as defined in the Remittance Rate: Floating Rate equal
Pooling and Servicing Agreement to the Adjusted Weighted Average
dated as of March 1, 2001 Contract Rate (subject to a maximum
of ____%)
Denomination:
First Remittance Date: Aggregate Denomination of All Class
May 1, 2001 B-[1][2] Certificates: $___________
Servicer: Maturity Date: July 1, 2032 (or if
Conseco Finance Corp. such day is not a Business Day, then
the next succeeding Business Day)
CUSIP: _____
C-1-1
MANUFACTURED HOUSING CONTRACT SENIOR/SUBORDINATE
PASS-THROUGH CERTIFICATES, SERIES 2001-1, CLASS B-[1][2] (SUBORDINATE)
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
CONSECO FINANCE CORP. OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT SET FORTH
IN THE AGREEMENT.
This certifies that [Cede & Co.] [Green Tree Finance Corp.-Two] is the
registered owner of the undivided Percentage Interest represented by the
original principal amount set forth above in Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificate Trust 2001-1 (the "Trust"), which
includes among its assets a pool of manufactured housing installment sale
contracts and installment loan agreements (including, without limitation, all
related security interests and any and all rights to receive payments which are
due pursuant thereto after the applicable Cut-off Date). The Trust has been
created pursuant to a Pooling and Servicing Agreement (the "Agreement"), dated
as of March 1, 2001, among Conseco Finance Corp., as Originator and Servicer
(the "Originator"), Conseco Finance Securitizations Corp., as Seller (the
"Seller"), and U.S. Bank National Association, as Trustee of the Trust (the
"Trustee"). This Certificate is one of the Certificates described in the
Agreement and is issued pursuant and subject to the Agreement. By acceptance of
this Certificate the holder assents to and becomes bound by the Agreement. To
the extent not defined herein, all capitalized terms have the meanings assigned
to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on the first day
(or if such day is not a Business Day, the next succeeding Business Day) (the
"Remittance Date") of each month commencing in May 2001 so long as the Agreement
has not been terminated, by check (or, if such Certificateholder holds a Class
of Class B Certificates with an aggregate Percentage Interest of at least 5% and
so desires, by wire transfer pursuant to instructions delivered to the Trustee
at least 10 days prior to such Remittance Date) to the registered
Certificateholder at the address appearing on the Certificate Register as of the
Business Day immediately preceding such Remittance Date, in an amount equal to
the Certificateholder's Percentage Interest of the Class [B-1/B-2] Distribution
Amount for such Remittance Date. The Maturity Date of this Certificate is July
1, 2032, or the next succeeding Business Day if such July 1 is not a Business
Day.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds in the Certificate Account to the extent
available for distribution to the Certificateholder as provided in the Agreement
for payment hereunder and that the Trustee in its individual capacity is not
personally liable to the Certificateholder for any amounts payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement. By acceptance of this Certificate,
the Certificateholder agrees to disclosure of his, her or its name and address
to other Certificateholders under the conditions specified in the Agreement.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for information with respect to the interests, rights,
benefits, obligations, proceeds and duties evidenced hereby and the rights,
duties and immunities of the Trustee. Copies of the
C-1-2
Agreement and all amendments thereto will be provided to any Certificateholder
free of charge upon a written request to the Trustee.
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trustee in
St. ▇▇▇▇, Minnesota, accompanied by a written instrument of transfer in form
satisfactory to the Trustee and the Certificate Registrar duly executed by the
holder thereof or his or her attorney duly authorized in writing, and thereupon
one or more new Certificates evidencing the same aggregate Percentage Interest
will be issued to the designated transferee or transferees.
[Unless this Certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC") to Issuer or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]
The Originator, the Seller, the Servicer, the Trustee, the Paying Agent and
the Certificate Registrar and any agent of the Originator, the Seller, the
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Originator, the Seller, the Servicer, the Trustee,
the Paying Agent, the Certificate Registrar nor any such agent shall be affected
by any notice to the contrary.
C-1-3
IN WITNESS WHEREOF, Manufactured Housing Contract Senior/ Subordinate Pass-
Through Certificate Trust 2001-1 has caused this Certificate to be duly executed
by the manual signature of a duly authorized officer of the Trustee.
Dated: MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE
PASS-THROUGH CERTIFICATE
TRUST 2001-1
By U.S. BANK NATIONAL ASSOCIATION
By_________________________________
Authorized Officer
C-1-4
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ______________________________ the within Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificate and does hereby irrevocably
constitute and appoint ______________________________ Attorney to transfer the
said certificate on the Certificate Register maintained by the Trustee, with
full power of substitution in the premises.
Dated: By______________________________
Signature
C-1-5
EXHIBIT C-2
-----------
FORM OF CLASS B-3I CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES, THE CLASS M CERTIFICATES AND THE CLASS B CERTIFICATES AS DESCRIBED
IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 9.02 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
Class B-3I No._____
(Subordinate)
Cut-off Date: as defined in the Percentage Interest: _____%
Pooling and Servicing Agreement
dated as of March 1, 2001
First Remittance Date: Maturity Date:
May 1, 2001 July 1, 2032
(or if such day is not a Business
Day, then the next succeeding
Business Day)
Servicer:
Conseco Finance Corp.
C-2-1
MANUFACTURED HOUSING CONTRACT SENIOR/SUBORDINATE
PASS-THROUGH CERTIFICATES, SERIES 2001-1, CLASS B-3I (SUBORDINATE)
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN
CONSECO FINANCE CORP. OR ANY AFFILIATE THEREOF, EXCEPT TO THE EXTENT SET FORTH
IN THE AGREEMENT.
This certifies that Green Tree Finance Corp.-Two is the registered owner of
the undivided Percentage Interest set forth above in Manufactured Housing
Contract Senior/Subordinate Pass-Through Certificate Trust 2001-1 (the "Trust"),
which includes among its assets a pool of manufactured housing installment sale
contracts and installment loan agreements (including, without limitation, all
related security interests and any and all rights to receive payments which are
due pursuant thereto after the applicable Cut-off Date). The Trust has been
created pursuant to a Pooling and Servicing Agreement (the "Agreement"), dated
as of March 1, 2001, among Conseco Finance Corp., as Originator and Servicer
(the "Originator"), Conseco Finance Securitizations Corp., as Seller (the
"Seller"), and U.S. Bank National Association, as Trustee of the Trust (the
"Trustee"). This Certificate is one of the Certificates described in the
Agreement and is issued pursuant and subject to the Agreement. By acceptance of
this Certificate the holder assents to and becomes bound by the Agreement. To
the extent not defined herein, all capitalized terms have the meanings assigned
to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on the first day
(or if such day is not a Business Day, the next succeeding Business Day) (the
"Remittance Date") of each month commencing in May 2001 so long as the Agreement
has not been terminated, by check (or, if such Certificateholder holds Class B-
3I Certificates with an aggregate Percentage Interest of at least 5% and so
desires, by wire transfer pursuant to instructions delivered to the Trustee at
least 10 days prior to such Remittance Date) to the registered Certificateholder
at the address appearing on the Certificate Register as of the Business Day
immediately preceding such Remittance Date, in an amount equal to the
Certificateholder's Percentage Interest of the Class B-3I Distribution Amount
for such Remittance Date. The Maturity Date of this Certificate is July 1, 2032
or the next succeeding Business Day if such July 1 is not a Business Day.
THIS CERTIFICATE IS AN INTEREST ONLY CERTIFICATE. THE HOLDER OF THIS
CERTIFICATE SHALL NOT BE ENTITLED TO ANY DISTRIBUTIONS OF PRINCIPAL WITH RESPECT
TO THE CONTRACTS.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds in the Certificate Account to the extent
available for distribution to the Certificateholder as provided in the Agreement
for payment hereunder and that the Trustee in its individual capacity is not
personally liable to the Certificateholder for any amounts payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement. By acceptance of this
Certificate, the Certificateholder agrees to disclosure of his, her or its name
and address to other Certificateholders under the conditions specified in the
Agreement.
C-2-2
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for information with respect to the interests, rights,
benefits, obligations, proceeds and duties evidenced hereby and the rights,
duties and immunities of the Trustee. Copies of the Agreement and all
amendments thereto will be provided to any Certificateholder free of charge upon
a written request to the Trustee.
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Certificate is registrable in the Certificate
Register of the Certificate Registrar upon surrender of this Certificate for
registration of transfer at the office or agency maintained by the Trustee in
St. ▇▇▇▇, Minnesota, accompanied by a written instrument of transfer in form
satisfactory to the Trustee and the Certificate Registrar duly executed by the
holder thereof or his or her attorney duly authorized in writing, and thereupon
one or more new Certificates evidencing the same aggregate Percentage Interest
will be issued to the designated transferee or transferees.
The Originator, the Seller, the Servicer, the Trustee, the Paying Agent and
the Certificate Registrar and any agent of the Originator, the Seller, the
Servicer, the Trustee, the Paying Agent or the Certificate Registrar may treat
the person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Originator, the Seller, the Servicer, the Trustee,
the Paying Agent, the Certificate Registrar nor any such agent shall be affected
by any notice to the contrary.
C-2-3
IN WITNESS WHEREOF, Manufactured Housing Contract Senior/ Subordinate Pass-
Through Certificate Trust 2001-1 has caused this Certificate to be duly executed
by the manual signature of a duly authorized officer of the Trustee.
Dated: MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE
PASS-THROUGH CERTIFICATE TRUST 2001-1
By U.S. BANK NATIONAL ASSOCIATION
By_________________________________
Authorized Officer
C-2-4
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ______________________________ the within Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificate and does hereby irrevocably
constitute and appoint ______________________________ Attorney to transfer the
said certificate on the Certificate Register maintained by the Trustee, with
full power of substitution in the premises.
Dated: By_______________________________
Signature
C-2-5
EXHIBIT D
---------
FORM OF ASSIGNMENT
In accordance with the Pooling and Servicing Agreement (the "Agreement")
dated as of March 1, 2001 among Conseco Finance Corp., as Originator and
Servicer (the "Originator"), Conseco Finance Securitizations Corp., as Seller
(the "Seller") and U.S. Bank National Association, as Trustee (the "Trustee"),
the Seller does hereby transfer, assign, set over and otherwise convey to the
Trustee (i) all the right, title and interest of the Seller in and to the
Contracts, including, without limitation, all right, title and interest in and
to the Collateral Security and all rights to receive payments on or with respect
to the Contracts (other than principal and interest due on the Contracts on or
before the applicable Cut-off Date), (ii) all rights under every Hazard
Insurance Policy relating to a Manufactured Home securing a Contract for the
benefit of the owner of such Contract, (iii) all rights under all FHA/VA
Regulations pertaining to any Contract that is an FHA/VA Contract, (iv) all
rights of the Seller under the Transfer Agreement, (v) the proceeds from the
Errors and Omissions Protection Policy and all rights under any blanket hazard
insurance policy to the extent they relate to the Manufactured Homes, (vi) all
documents contained in the Contract Files and the Land-and-Home Contract Files,
(vii) amounts on deposit in the Capitalized Interest Account, the Pre-Funding
Account and the Staged-Funding Reserve Account, and (viii) all proceeds and
products in any way derived from any of the foregoing. Capitalized terms used
herein but not defined herein have the meanings assigned to them in the
Agreement.
This Assignment is made pursuant to and upon the representation and
warranties on the part of the undersigned contained in Article III of the
Agreement and no others.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be duly
executed this _____ day of March, 2001.
CONSECO FINANCE SECURITIZATIONS CORP.
By__________________________________
[Name]
[Title]
D-1
EXHIBIT E
---------
FORM OF CERTIFICATE OF OFFICER
[CONSECO FINANCE CORP.]
[CONSECO FINANCE SECURITIZATIONS CORP.]
OFFICER'S CERTIFICATE
We, ______________ and ______________, hereby certify that we are the
duly elected _________________ and ______________, respectively, of [Conseco
Finance Corp. ("Conseco Finance")] [Conseco Finance Securitizations Corp.
("Conseco Securitizations")], and that as such we are duly authorized to execute
and deliver this Certificate on behalf of [Conseco Finance] [Conseco
Securitizations] in connection with the Pooling and Servicing Agreement, dated
as of March 1, 2001 (the "Pooling and Servicing Agreement") among Conseco
Finance Corp., Conseco Finance Securitizations Corp. and U.S. Bank National
Association, as Trustee, and the Underwriting Agreement relating to the Class A,
Class M-1, Class M-2 and Class B-1 Certificates, dated March __, 2001, (the
"Underwriting Agreement"), among Conseco Finance Corp., Conseco Finance
Securitizations Corp. and Credit Suisse First Boston Corporation, ▇▇▇▇▇▇
Brothers Inc. and ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated (the
"Underwriters") (all capitalized terms used herein without definition having the
respective meanings specified in the Pooling and Servicing Agreement and the
Underwriting Agreement) and further certify as follows:
1. Attached hereto as Exhibits I and II, respectively, are true and
correct copies of the [Certificate] [Articles] of Incorporation and [Restated]
Bylaws of [Conseco Finance] [Conseco Securitizations], together with all
amendments thereto, both of which are in full force and effect on the date
hereof.
2. No proceedings looking toward merger, liquidation, dissolution or
bankruptcy of [Conseco Finance] [Conseco Securitizations] are pending or
contemplated.
3. There is no litigation pending, or to our knowledge, threatened,
which, if determined adversely to [Conseco Finance] [Conseco Securitizations],
would affect adversely the sale of the Contracts, the execution, delivery or
enforceability of the Pooling and Servicing Agreement, the Transfer Agreement
and the Underwriting Agreement (the "Transaction Documents")[, or the ability of
Conseco Finance to service and administer the Contracts in accordance with the
terms of the Pooling and Servicing Agreement].
4. Each person who, as an officer or representative of [Conseco Finance]
[Conseco Securitizations], signed the Transaction Documents, or any other
document delivered prior hereto or on the date hereof in connection with the
sale and servicing of the Contracts in accordance with the Transaction
Documents, was at the time of such signing and is as of the date hereof duly
elected or appointed, qualified and acting as such officer or representative,
and the signatures of such persons appearing on such documents are their genuine
signatures.
5. Neither the execution and delivery by [Conseco Finance] [Conseco
Securitizations] of the Transaction Documents, nor its compliance with the terms
and provisions
E-1
thereof, will conflict with, or result in a breach of, any of the terms of, or
constitute a default under, any judgment, order, injunction or decree of any
domestic court or governmental authority to which [Conseco Finance] [Conseco
Securitizations] is subject or any indenture, agreement, contract or commitment
to which [Conseco Finance] [Conseco Securitizations] is a party or by which it
is bound, which conflict, breach or default presents a reasonable possibility of
having a materially adverse effect on the business or operations of [Conseco
Finance] [Conseco Securitizations]. No UCC-1 financing statements or statements
of assignment listing [Conseco Finance] [Conseco Securitizations] as debtor and
describing any of the Contracts as collateral other than the UCC-1 financing
statement in favor of the Trustee, have been signed on behalf of [Conseco
Finance] [Conseco Securitizations] and filed by any person after
_____________________ and prior to the date hereof.
6. Attached hereto as Exhibit IV is a certified true copy of the
resolutions of the Board of Directors of [Conseco Finance] [Conseco
Securitizations] (the "Resolutions") adopted with respect to the authorization
of [Conseco Finance] [Conseco Securitizations] to take such actions and enter
into such agreements as are necessary to sell and service the Contracts in
accordance with the Transaction Documents; said resolutions have not been
amended, modified, annulled or revoked and are in full force and effect on the
date hereof.
[7. The Registration Statement and the Prospectus, at the time the
Registration Statement became effective did comply, and as of the date hereof
comply, in all material respects with the requirements of the Securities Act of
1933, as amended (the "1933 Act") and the Regulations. The Registration
Statement, at the time it became effective did not, and as of the date hereof
does not, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading. The Prospectus as of the date thereof did not, and as
of the date hereof does not, contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
provided, however, that the representations and warranties in this subsection
shall not apply to statements in, or omissions from, the Registration Statement
or Prospectus made in reliance upon and in conformity with information furnished
to [Conseco Finance] [Conseco Securitizations] in writing by the Underwriters
expressly for use in the Registration Statement or Prospectus. The conditions
to the use by [Conseco Finance] [Conseco Securitizations] of registration
statement on Form S-3 under the 1933 Act, as set forth in the General
Instructions to Form S-3, have been satisfied with respect to the Registration
Statement and the Prospectus. There are no contracts or documents of [Conseco
Finance] [Conseco Securitizations] which are required to be filed as exhibits to
the Registration Statement pursuant to the 1933 Act or the Regulations which
have not been so filed.]
8. Each of the representations and warranties contained in [Sections 3.01
and 3.03 of the Pooling and Servicing Agreement] [Section 3.1 (other than
Section 3.1(a)) of the Transfer Agreement] and Section 1 of the Underwriting
Agreement is true and correct on and as of the date hereof. [To the best of our
knowledge, the representations and warranties of Conseco Finance contained in
Section 3.1(a) of the Transfer Agreement are true and correct on the date
hereof.]
E-2
9. [Conseco Finance] [Conseco Securitizations] has complied with all the
agreements by which it is bound in connection with the transactions contemplated
by the Transaction Documents, and has satisfied all the conditions on its part
to be performed or satisfied prior to the Closing Date in connection with the
transactions contemplated by the Transaction Documents.
10. The Transaction Documents have been duly executed by [Conseco Finance]
[Conseco Securitizations] pursuant to and in compliance with the Resolutions.
11. No event with respect to [Conseco Finance] [Conseco Securitizations]
has occurred or is continuing which would constitute an Event of Termination or
an event that with notice or lapse of time or both would become an Event of
Termination under the Pooling and Servicing Agreement.
IN WITNESS WHEREOF, I have affixed hereunto my signature this _____ day of
March, 2001.
[CONSECO FINANCE CORP.]
By_________________________________
[Name]
[Title]
[CONSECO FINANCE SECURITIZATIONS CORP.]
By_________________________________
[Name]
[Title]
E-3
EXHIBIT F
---------
FORM OF OPINION OF COUNSEL
The opinion of ▇▇▇▇▇▇ and ▇▇▇▇▇▇, Professional Association shall be to the
effect that undefined capitalized terms have the meanings set forth in the
Pooling and Servicing Agreement):
1. The Originator is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware, with corporate
power to execute, deliver and perform its obligations under the Pooling and
Servicing Agreement, the Transfer Agreement and the Underwriting Agreement
(collectively, the "Transaction Documents") (including the Limited Guaranty
contained in the Pooling and Servicing Agreement). The Seller is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Minnesota, with corporate power to execute, deliver and perform in its
obligations under the Transaction Documents.
2. The Transaction Documents have been duly authorized by all requisite
corporate action, duly executed and delivered by the Originator and the Seller,
and constitute the valid and binding obligations of the Originator and the
Seller enforceable in accordance with their terms. The Certificates have been
duly authorized by all requisite corporate action and, when duly and validly
executed by the Trustee in accordance with the Pooling and Servicing Agreement,
will be validly issued and outstanding and entitled to the benefits of the
Pooling and Servicing Agreement.
3. No consent, approval, authorization or order of any state or federal
court or governmental agency or body is required to be obtained by the
Originator or the Seller for the consummation of the transactions contemplated
by the Transaction Documents, except such as may be required under blue sky laws
under any jurisdiction in connection with the offering of the Certificates by
the Underwriters pursuant to the Underwriting Agreement.
4. The Pooling and Servicing Agreement is not required to be qualified
under the Trust Indenture Act of 1939, as now in effect, and the Trust is not
required to be registered as an investment company under the Investment Company
Act of 1940.
5. Neither the transfer of the Contracts by the Originator to the Seller,
nor the assignment of the Originator's security interest on the related
Manufactured Homes, nor the issuance or sale of the Certificates, nor the
execution and delivery of the Transaction Documents, nor the consummation of any
other of the transactions contemplated in the Transaction Documents nor the
fulfillment of the terms of the Certificates or the Transaction Documents by the
Originator, will conflict with, or result in a breach, violation or acceleration
of, or constitute a default under, any term or provision of the Certificate of
Incorporation or Bylaws of the Originator or of any indenture or other agreement
or instrument known to us to which the Originator is a party or by which it is
bound, or result in a violation of, or contravene the terms of any statute,
order or regulation, applicable to the Originator, of any court, regulatory
body, administrative agency or governmental body having jurisdiction over it.
F-1
6. Neither the transfer of the Contracts by the Seller to the Trustee
acting on behalf of the Trust, nor the assignment of the Seller's security
interest on the related Manufactured Homes, nor the issuance or sale of the
Certificates, nor the execution and delivery of the Transaction Documents, nor
the consummation of any other of the transactions contemplated in the
Transaction Documents, nor the fulfillment of the terms of the Certificates or
the Transaction Documents by the Seller, will conflict with, or result in a
breach, violation or acceleration of, or constitute a default under, any term or
provision of the Articles of Incorporation or Bylaws of the Seller or of any
indenture or other agreement or instrument known to us to which the Seller is a
party or by which it is bound, or result in a violation of, or contravene the
terms of any statute, order or regulation, applicable to the Seller, of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over it.
7. There are no actions or proceedings pending, nor to the best of our
knowledge, are there any investigations pending or overtly threatened against
the Originator or the Seller before any court, administrative agency or other
tribunal (A) asserting the invalidity of the Transaction Documents, the
Certificates, the hazard or flood insurance policies applicable to any Contracts
or the Errors and Omissions Protection Policy, (B) seeking to prevent the
issuance of the Certificates or the consummation of any of the transactions
contemplated by the Transaction Documents, (C) which is likely materially and
adversely to affect the performance by the Originator or the Seller of its
obligations under, or the validity or enforceability of, the Transaction
Documents or the Certificates, or (D) seeking adversely to affect the federal
income tax attributes of the Certificates described in the Prospectus and the
Prospectus Supplement under the heading "Federal Income Tax Consequences."
8. The transfer of the Initial and Additional Contracts to the Trust in
accordance with Section 2.01 of the Pooling and Servicing Agreement would not be
avoidable as a preferential transfer under Section 547 of the United States
Bankruptcy Code (11 U.S.C. (S) 547), as in effect on the date hereof, in the
event that the Originator became a debtor under the United States Bankruptcy
Code.
9. Pursuant to the Transfer Agreement the Originator has transferred to
the Seller all of the Originator's right, title and interest in the Contracts,
free and clear of any and all other assignments, encumbrances, options, rights,
claims, liens or security interests (except tax or possessory liens) that may
affect the right of the Seller in and to such Contracts, and has delivered the
Land-and-Home contract Files to the Trustee (as the Seller's designee) or its
custodian. No filing or other action, other than the filing of a financing
statement on Form UCC-1 with the Secretary of State of the State of Minnesota
identifying the Contracts as collateral and naming the Originator as debtor and
the Seller as secured party, and the filing of continuation statements as
required by the Transfer Agreement, is necessary to perfect as against third
parties the assignment of the Contracts by the Originator to the Seller. We
have separately provided you with our opinion concerning whether such assignment
could be recharacterized as a pledge rather than a sale in the event the
Originator became a debtor under the United States Bankruptcy Code. However, in
the event such assignment were recharacterized as a pledge securing a loan from
the Seller to the Originator, it is our opinion that the Seller would be deemed
to have a valid and perfected security interest in the Initial and Additional
Contracts and the proceeds thereof, which security interest would be prior to
any other security interest that may be perfected under the Uniform Commercial
Code as in effect in the State of Minnesota and over any "lien creditor" (as
F-2
defined in Minn. Stat. (S)336.9-301(3)) who becomes such after the Closing Date,
except that a subsequent purchaser of any Contract who gives new value and takes
possession thereof in the ordinary course of his business would have priority
over the Seller's security interest in such Contracts, if such purchaser acts
without knowledge that such Contract was subject to a security interest. We
have assumed for the purposes of this opinion that during the term of the
Pooling and Servicing Agreement the Trustee, or its custodian, shall maintain
possession of the Land-and-Home Contract Files for the purpose of perfecting the
assignment to the Seller of the Contracts. We express no opinion with respect
to the enforceability of any individual Contract or the existence of any claims,
rights or other matters in favor of any Obligor.
10. Pursuant to the Pooling and Servicing Agreement the Seller has
transferred to the Trustee acting on behalf of the Trust all of the Seller's
right, title and interest in the Contracts, free and clear of any and all other
assignments, encumbrances, options, rights, claims, liens or security interests
(except tax or possessory liens) that may affect the right of the Trustee in and
to such Contracts, and has delivered the Land-and-Home Contract Files to the
Trustee or its custodian. No filing or other action, other than the filing of a
financing statement on Form UCC-1 with the Secretary of State of the State of
Minnesota identifying the Contracts as collateral and naming the Seller as
debtor and the Trustee as secured party, and the filing of continuation
statements as required by the Pooling and Servicing Agreement, is necessary to
perfect as against third parties the assignment of the Contracts by the Seller
to the Trustee. We have separately provided you with our opinion concerning
whether such assignment could be recharacterized as a pledge rather than a sale
in the event the Seller became a debtor under the United States Bankruptcy Code.
However, in the event such assignment were recharacterized as a pledge securing
a loan from the Certificateholders to the Seller, it is our opinion that the
Trustee would be deemed to have a valid and perfected security interest in the
Contracts and the proceeds thereof, which security interest would be prior to
any other security interest that may be perfected under the Uniform Commercial
Code as in effect in the State of Minnesota and over any "lien creditor" (as
defined in Minn. Stat. (S)336.9-301(3)) who becomes such after the Closing Date,
except that a subsequent purchaser of any Contract, who gives new value and
takes possession thereof in the ordinary course of his business would have
priority over the Trustee's security interest in such Contract, if such
purchaser acts without knowledge that such Loan was subject to a security
interest. We have assumed for the purposes of this opinion that during the term
of the Pooling and Servicing Agreement the Trustee, or its custodian, shall
maintain possession of the Land-and-Home Contract Files for the purpose of
perfecting the assignment to the Trustee of the Contracts. We express no
opinion with respect to the enforceability of any individual Contract or the
existence of any claims, rights or other matters in favor of any Obligor.
11. In reliance upon certain representations and warranties set forth in
the Pooling and Servicing Agreement and assuming that the Originator and the
Trustee comply with the requirements of the Pooling and Servicing Agreement,
including the filing on behalf of each of the Master REMIC , Intermediate REMIC
and Subsidiary REMIC of a proper election to be taxed as a REMIC, as of the date
hereof each of the Master REMIC, Intermediate REMIC and Subsidiary REMIC created
pursuant to the Pooling and Servicing Agreement will qualify as a REMIC.
Further, the Regular Certificates will evidence ownership of the "regular
interests" in the Master REMIC and the Class C Master Certificate, Class C
Intermediate Certificate and Class C Subsidiary Certificate will evidence
ownership of the single class of "residual interest"
F-3
in the Master REMIC, Intermediate REMIC and Subsidiary REMIC respectively. For
Minnesota income and franchise tax purposes, and subject to the foregoing
assumptions, and the provisions of Minnesota law as of the date hereof, the
Trust (excluding the Capitalized Interest Account, Staged-Funding Contract
Reserve Account and Pre-Funding Account) will not be subject to tax and the
income of the Trust will be taxable to the holders of interests therein, all in
accordance with the provisions of the Code concerning REMICs. Moreover,
ownership of Certificates will not be a factor in determining whether such owner
is subject to Minnesota income and franchise taxes. Therefore, if the owner of
Certificates is not otherwise subject to Minnesota income or franchise taxes in
the State of Minnesota, such owner will not become subject to such Minnesota
taxes solely by virtue of owning Certificates.
12. The transfer of the Initial and Additional Contracts and the proceeds
thereof by the Originator to the Seller on the date hereof pursuant to the
Transfer Agreement would not be avoidable as a fraudulent transfer under the
Uniform Fraudulent Transfer Act as in effect in Minnesota on the date hereof
(Minn. Stat. (S)(S) 513.41 through 513.51), nor, should the Originator become a
debtor under the United States Bankruptcy Code, as a fraudulent transfer under
Section 548 of the United States Bankruptcy Code (11 U.S.C. (S) 548) as in
effect on the date hereof.
13. The transfer of the Initial and Additional Contracts and the proceeds
thereof by the Seller to the Trustee on the date hereof pursuant to the Pooling
and Servicing Agreement would not be avoidable as a fraudulent transfer under
the Uniform Fraudulent Transfer Act as in effect in Minnesota on the date hereof
(Minn. Stat. (S)(S) 513.41 through 513.51), nor, should the Seller become a
debtor under the United States Bankruptcy Code, as a fraudulent transfer under
Section 548 of the United States Bankruptcy Code (11 U.S.C. (S) 548) as in
effect on the date hereof.
F-4
EXHIBIT G
---------
FORM OF TRUSTEE'S ACKNOWLEDGEMENT
U.S. Bank National Association, a national banking association, acting as
trustee (the "Trustee") of the trust created pursuant to the Pooling and
Servicing Agreement, dated as of March 1, 2001, among Conseco Finance Corp. (the
"Originator"), Conseco Finance Securitizations Corp. (the "Seller") and the
Trustee (the "Pooling and Servicing Agreement") (all capitalized terms used
herein without definition having the respective meanings specified in the
Pooling and Servicing Agreement), acknowledges, pursuant to Section 2.03 of the
Pooling and Servicing Agreement, that the Trustee has received and holds in
trust thereunder the following (i) all right, title and interest in and to the
manufactured housing contracts identified on the List of Contracts [delivered
pursuant to Section 2.02(a) of the Pooling and Servicing Agreement] [delivered
with the Subsequent Transfer Instrument of even date herewith] (the
"Contracts"), including, without limitation, all right, title and interest in
and to the Collateral Security and all rights to receive payments on or with
respect to the Contracts (other than the principal and interest due on the
Contracts on or before the applicable Cut-off Date), (ii) all rights under every
Hazard Insurance Policy relating to a Manufactured Home securing a Contract for
the benefit of the creditor of such Contract, (iii) all rights under all FHA/VA
Regulations pertaining to any FHA/VA Contract, (iv) the proceeds from the Errors
and Omissions Protection Policy and all rights under any blanket hazard
insurance policy to the extent they relate to the Manufactured Homes, (v) all
rights of the Seller under the Transfer Agreement, (vi) all documents contained
in the Contract Files and the Land-and-Home Contract Files, (vii) amounts on
deposit in the Capitalized Interest Account, the Pre-Funding Account and the
Staged-Funding Reserve Account and (viii) all proceeds and products in any way
derived from any of the foregoing.
The Trustee further acknowledges that the Trustee, directly or through a
custodian, will hold said rights, interests and proceeds in trust for the use
and benefit of all Certificateholders.
IN WITNESS WHEREOF, U.S. Bank National Association, as Trustee, has caused
this acknowledgment to be executed by its duly authorized officer as of the
_____ day of March, 2001.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By_______________________________________
Name:
Title:
G-1
EXHIBIT H
---------
FORM OF CUSTODIAN'S ACKNOWLEDGEMENT
U.S. Bank Trust National Association, a national banking association (the
"Custodian") acting as Custodian under a Custodial Agreement (the "Custodial
Agreement") dated as of March 1, 2001, between the Custodian and U.S. Bank
National Association, as Trustee (the "Trustee") under the Pooling and Servicing
Agreement dated as of March 1, 2001 among Conseco Finance Corp., as Originator
and Servicer (the "Originator"), Conseco Finance Securitizations Corp., as
Seller (the "Seller"), and the Trustee, pursuant to which the Custodian holds on
behalf of the Trustee certain "Land-and-Home Contract Files," as described in
the Pooling and Servicing Agreement, hereby acknowledges receipt of such Land-
and-Home Contract Files, except as noted on the exception list attached hereto.
The Custodian further acknowledges that it will, within 90 days of the date of
the Custodial Agreement, conduct a review of the Land-and-Home Contract Files
and confirm to the Trustee and the Originator that each Land-and-Home Contract
File includes (a) an original executed copy of the Land-and-Home Contract, (b)
an original or a copy of the related Mortgage, (c) an assignment of the
Land-and-Home Contract and the related Mortgage from the originator (if other
than the Originator) to the Originator, (d) an endorsement of the Land-and-Home
Contract by the Originator to the Trustee or in blank, (e) an assignment of the
related Mortgage to the Trustee or in blank, and (f) any extension, modification
or waiver agreement(s), except as noted on the document exception listing to be
attached to such confirmation. The Custodian will not otherwise review the Land-
and-Home Contracts and Land-and-Home Contract Files for compliance with the
terms of the Pooling and Servicing Agreement.
IN WITNESS WHEREOF, U.S. Bank Trust National Association has caused this
acknowledgment to be executed by its duly authorized officer as of the _____ day
of March, 2001.
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Custodian
By________________________________
Its_______________________________
H-1
EXHIBIT I
---------
FORM OF CERTIFICATE OF SERVICING OFFICER
CONSECO FINANCE CORP.
The undersigned certifies that he is a [title] of Conseco Finance Corp., a
-----
Delaware corporation (the "Company"), and that as such he is duly authorized to
execute and deliver this certificate on behalf of the Company pursuant to
Section 6.02 of the Pooling and Servicing Agreement (the "Agreement") dated as
of March 1, 2001 among the Company, Conseco Finance Securitizations Corp. and
U.S. Bank National Association, as Trustee (all capitalized terms used herein
without definition having the respective meanings specified in the Agreement),
and further certifies that:
1. The Monthly Report for the period from _____________ to _____________
attached to this certificate is complete and accurate in accordance with the
requirements of Sections 6.01 and 6.02 of the Agreement; and
2. As of the date hereof, no Event of Termination or event that with
notice or lapse of time or both would become an Event of Termination has
occurred.
IN WITNESS WHEREOF, I have affixed hereunto my signature the ___ day of
_________, ____.
CONSECO FINANCE CORP.
By__________________________
[Name]
[Title]
I-1
EXHIBIT J
---------
FORM OF CLASS C [SUBSIDIARY] [INTERMEDIATE] [MASTER] CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE
UNCERTIFICATED [SUBSIDIARY] [INTERMEDIATE] [MASTER] INTERESTS AS DESCRIBED IN
THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 9.02 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE MAY NOT BE RESOLD OR TRANSFERRED EXCEPT IN ACCORDANCE
WITH THE PROVISIONS OF SECTION 9.02 OF THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE. THIS CERTIFICATE MAY ONLY BE TRANSFERRED TO A PERMITTED
TRANSFEREE (AS DEFINED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN); ANY SUCH TRANSFER MUST ALSO SATISFY THE OTHER REQUIREMENTS OF SECTION
9.02 OF SUCH POOLING AND SERVICING AGREEMENT.
Class C [Subsidiary] No.
[Intermediate] [Master]
(Subordinate)
Cut-off Date: as defined in the Percentage Interest: 100%
Pooling and Servicing Agreement
dated as of March 1, 2001
First Remittance Date:
May 1, 2001
J-1
MANUFACTURED HOUSING CONTRACT SENIOR/SUBORDINATE
PASS-THROUGH CERTIFICATES, SERIES 2001-1, CLASS C [SUBSIDIARY]
-------------------------------------------------------------
[INTERMEDIATE] [MASTER] (RESIDUAL INTEREST)
-------------------------------------------
Cut-off Date Pool Principal Balance: $600,000,000 (Approximate)
This certifies that Green Tree Finance Corp.-Two is the registered owner of
the Residual Interest represented by this Certificate, and entitled to certain
distributions out of Manufactured Housing Contract Senior/Subordinate Pass-
Through Certificate Trust 2001-1 (the "Trust"), which includes among its assets
a pool of manufactured housing installment sale contracts and installment loan
agreements (including, without limitation, all related security interests and
any and all rights to receive payments which are due pursuant thereto after the
applicable Cut-off Date) (the "Contracts"). The Trust has been created pursuant
to a Pooling and Servicing Agreement (the "Agreement"), dated as of March 1,
2001, among Conseco Finance Corp., as Originator and Servicer (the
"Originator"), Conseco Finance Securitizations Corp., as Seller (the "Seller"),
and U.S. Bank National Association, as Trustee of the Trust (the "Trustee").
This Class C [Subsidiary] [Intermediate] [Master] Certificate is the Class C
[Subsidiary] [Intermediate] [Master] Certificate described in the Agreement and
is issued pursuant and subject to the Agreement. By acceptance of this Class C
[Subsidiary] [Intermediate] [Master] Certificate the holder assents to and
becomes bound by the Agreement. To the extent not defined herein, all
capitalized terms have the meanings assigned to such terms in the Agreement.
The Agreement contemplates, subject to its terms, payment on the first day
(or if such day is not a Business Day, the next succeeding Business Day) (the
"Remittance Date") of each month commencing in May 2001, so long as the
Agreement has not been terminated, by check (or, if such Class C [Subsidiary]
[Intermediate] [Master] Certificateholder holds a Class C [Subsidiary]
[Intermediate] [Master] Certificate with an aggregate Percentage Interest of at
least 20% and so desires, by wire transfer pursuant to instructions delivered to
the Trustee at least ten days prior to such Remittance Date) to the registered
Class C [Subsidiary] [Intermediate] [Master] Certificateholder at the address
appearing on the Certificate Register as of the Business Day immediately
preceding such Remittance Date, in an amount equal to the Class C [Subsidiary]
[Intermediate] [Master] Distribution Amount.
The Class C [Subsidiary] [Intermediate] [Master] Certificateholder, by its
acceptance of this Certificate, agrees that it will look solely to the funds in
the Certificate Account to the extent available for distribution to the Class C
[Subsidiary] [Intermediate] [Master] Certificateholder as provided in the
Agreement for payment hereunder and that the Trustee in its individual capacity
is not personally liable to the Class C [Subsidiary] [Intermediate] [Master]
Certificateholder for any amounts payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement. By acceptance of this Certificate, the
Certificateholder agrees to disclosure of his, her or its name and address to
other Certificateholders under the conditions specified in the Agreement.
This Class C [Subsidiary] [Intermediate] [Master] Certificate does not
purport to summarize the Agreement and reference is made to the Agreement for
information with respect to the interests, rights, benefits, obligations,
proceeds and duties evidenced hereby and the rights,
J-2
duties and immunities of the Trustee. Copies of the Agreement and all amendments
thereto will be provided to any Class C Certificateholder free of charge upon a
written request to the Trustee.
As provided in the Agreement and subject to the limitations set forth
therein, the transfer of this Class C [Subsidiary] [Intermediate] [Master]
Certificate is registrable in the Certificate Register of the Certificate
Registrar upon surrender of this Class C [Subsidiary] [Intermediate] [Master]
Certificate for registration of transfer at the office or agency maintained by
the Trustee in St. ▇▇▇▇, Minnesota, accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Certificate Registrar duly
executed by the holder thereof or his or her attorney duly authorized in
writing, and thereupon one or more new Class C [Subsidiary] [Intermediate]
[Master] Certificate evidencing the same aggregate amount of Class C
[Subsidiary] [Intermediate] [Master] Certificate will be issued to the
designated transferee or transferees.
As provided in the Agreement and subject to certain limitations therein set
forth, this Class C [Subsidiary] [Intermediate] [Master] Certificate is
exchangeable for a new Class C [Subsidiary] [Intermediate] [Master] Certificate
of authorized denominations evidencing the same aggregate Percentage Interest as
requested by the holder surrendering the same.
The Originator, the Servicer, the Trustee, the Paying Agent and the
Certificate Registrar and any agent of the Originator, the Servicer, the
Trustee, the Paying Agent or the Certificate Registrar may treat the person in
whose name this Class C [Subsidiary] [Intermediate] [Master] Certificate is
registered as the owner hereof for all purposes, and neither the Originator, the
Servicer, the Trustee, the Paying Agent, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
The holder of this Class C [Subsidiary] [Intermediate] [Master]
Certificate, by acceptance hereof, agrees that, in accordance with the
requirements of Section 860D(b)(1) of the Code, the federal tax return of the
Trust for its first taxable year shall provide that the [Subsidiary]
[Intermediate] [Master] REMIC elects to be treated as a "real estate mortgage
investment conduit" (a "REMIC") under the Code for such taxable year and all
subsequent taxable years. The Uncertificated [Subsidiary] [Intermediate]
[Master] Interests shall be "regular interests" in the [Subsidiary]
[Intermediate] [Master] REMIC and the Class C [Subsidiary] [Intermediate]
[Master] Certificate shall be the "residual interest" in the [Subsidiary]
[Intermediate] [Master] REMIC. In addition, the holder of this Class C
[Subsidiary] [Intermediate] [Master] Certificate, by acceptance hereof, (i)
agrees to file tax returns consistent with and in accordance with any elections,
decisions or other reports made or filed with regard to federal, state or local
taxes on behalf of the [Subsidiary] [Intermediate] [Master] REMIC, and (ii)
agrees to cooperate with the Originator in connection with examinations of the
[Subsidiary] [Intermediate] [Master] REMIC's affairs by tax authorities,
including administrative and judicial proceedings, and (iii) makes the
additional agreements, designations and appointments, and undertakes the
responsibilities, set forth in Section 6.06 of the Agreement.
J-3
IN WITNESS WHEREOF, Manufactured Housing Contract Senior/Subordinate Pass-
Through Certificate Trust 2001-1 has caused this Certificate to be duly executed
by the manual signature of a duly authorized officer of the Trustee.
Dated: MANUFACTURED HOUSING CONTRACT
SENIOR/SUBORDINATE
PASS-THROUGH CERTIFICATE
TRUST 2001-1
By U.S. BANK NATIONAL ASSOCIATION
By_________________________________
Authorized Officer
J-4
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ______________________ the within Manufactured Housing Contract
Senior/Subordinate Pass-Through Certificate, and does hereby irrevocably
constitute and appoint __________________________ Attorney to transfer the said
certificate on the Certificate Register maintained by the Trustee, with full
power of substitution in the premises.
Dated: By________________________
Signature
J-5
EXHIBIT K
---------
[RESERVED]
K-1
EXHIBIT L-1
-----------
FORM OF CERTIFICATE REGARDING REPURCHASED CONTRACTS
CONSECO FINANCE CORP.
CERTIFICATE REGARDING REPURCHASED CONTRACTS
The undersigned certifies that he is a [title] of Conseco Finance Corp., a
-----
Delaware corporation (the "Company"), and that as such he is duly authorized to
execute and deliver this certificate on behalf of the Company pursuant to
Section 3.06 of the Pooling and Servicing Agreement (the "Agreement"), dated as
of March 1, 2001 among the Company, Conseco Finance Securitizations Corp. and
U.S. Bank National Association, as Trustee (all capitalized terms used herein
without definition having the respective meanings specified in the Agreement),
and further certifies that:
1. The Contracts on the attached schedule are to be repurchased by the
Company on the date hereof pursuant to Section 3.06 of the Agreement.
2. Upon deposit of the Repurchase Price for such Contracts, such
Contracts may, pursuant to Section 3.06 of the Agreement, be assigned by the
Trustee to the Company.
IN WITNESS WHEREOF, I have affixed hereunto my signature this ___ day of
_______, ____.
CONSECO FINANCE CORP.
By_______________________________
[Name]
[Title]
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
-----------
FORM OF CERTIFICATE REGARDING SUBSTITUTED CONTRACTS
CONSECO FINANCE CORP.
CERTIFICATE REGARDING SUBSTITUTED CONTRACTS
The undersigned certify that they are [title] and [title], respectively of
Conseco Finance Corp., a corporation organized under the laws of Delaware ("the
Company"), and that as such they are duly authorized to execute and deliver this
certificate on behalf of the Company pursuant to Section 3.06(b) of the Pooling
and Servicing Agreement (the "Agreement"), dated as of March 1, 2001 among the
Company, Conseco Finance Securitizations Corp. and U.S. Bank National
Association, as Trustee (all capitalized terms used herein without definition
having the respective meanings specified in the Agreement), and further certify
that:
1. The Contract and Contract File [or Land-and-Home Contract File, as
applicable] for each such Eligible Substitute Contract [are being held by the
Company, as Servicer] have been delivered to [the Trustee or its Custodian]
[_________, the successor Servicer].
2. The Contracts on the attached schedule are to be substituted on the
date hereof pursuant to Section 3.06(b) of the Agreement and each such Contract
is an Eligible Substitute Contract [description how the Contracts satisfy the
definition of "Eligible Substitute Contract"].
3. The UCC-1 financing statements in respect of the Contracts to be
substituted, in the form required by Section 3.06 (b)(iii) of the Agreement,
have been filed with the appropriate offices.
4. (a) the Company shall have delivered to the Trustee, or its
Custodian, the related Land-and-Home Contract Files; and
(b) the Company has delivered to the Trustee an opinion of counsel
satisfactory to the Trustee to the effect that the Trustee holds a perfected
first priority lien in the real estate securing such Eligible Substitute
Contracts, or evidence of recordation of the assignment to the Trustee on behalf
of the Trust of each Mortgage securing such Eligible Contracts.
5. There has been deposited in the Certificate Account the amounts listed
on the schedule attached hereto as the amount by which the Scheduled Principal
Balance of each Replaced Contract exceeds the Scheduled Principal Balance of
each Contract being substituted therefor.
IN WITNESS WHEREOF, we have affixed hereunto our signatures this ___ day of
_______ ____.
CONSECO FINANCE CORP.
By_________________________________
[Name]
[Title]
L-2-1
EXHIBIT M
---------
FORM OF REPRESENTATION LETTER
-----------------------------
U.S. Bank National Association
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Conseco Finance Securitizations Corp.
300 Landmark Towers
▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
RE: Manufactured Housing Contract Senior/Subordinate Pass-Through
Certificates, Series 2001-1, Class [B-2/B-3I/C Subsidiary/C
Intermediate/C Master]
[The undersigned purchaser (the "Purchaser") understands that the purchase
of the above-referenced certificates (the "Certificates") may be made only by
institutions which are "Accredited Investors" under Regulation D, as promulgated
under the Securities Act of 1933, as amended (the "1933 Act"), which includes
banks, savings and loan associations, registered brokers and dealers, insurance
companies, investment companies, and organizations described in Section
501(c)(3) of the Internal Revenue Code, corporations, business trusts and
partnerships, not formed for the specific purpose of acquiring the Certificates
offered, with total assets in excess of $5,000,000. The undersigned represents
on behalf of the Purchaser that the Purchaser is an "Accredited Investor" within
the meaning of such definition. The Purchaser is urged to review carefully the
responses, representations and warranties it is making herein.]
Representations and Warranties
The Purchaser makes the following representations and warranties in order
to permit the Trustee, Conseco Finance Securitizations Corp., and [underwriter
of the Class B-2/B-3I/Class C Subsidiary/C Intermediate/Class C Master
Certificate] to determine its suitability as a purchaser of Certificates and to
determine that the exemption from registration relied upon by Conseco Finance
Securitizations Corp. under Section 4(2) of the 1933 Act is available to it.
1. The Purchaser understands that the Certificates have not been and will
not be registered under the 1933 Act and may be resold (which resale is not
currently contemplated) only if registered pursuant to the provisions of the
1933 Act or if an exemption from registration is available, that Conseco Finance
Securitizations Corp. is not required to register the Certificates and that any
transfer must comply with Section 9.02 of the Pooling and Servicing Agreement
relating to the Certificates.
2. The Purchaser will comply with all applicable federal and state
securities laws in connection with any subsequent resale of the Certificates.
3. [The Purchaser is a sophisticated institutional investor and has
knowledge and experience in financial and business matters and is capable of
evaluating the merits and risks of its investment in the Certificates and is
able to bear the economic risk of such investment. The
M-1
Purchaser has reviewed the Prospectus dated March 16, 2001 and related
Prospectus Supplement dated March 16, 2001, with respect to the Certificates,
and has been given such information concerning the Certificates, the underlying
installment sale contracts and Conseco Finance Securitizations Corp. as it has
requested .]
4. The Purchaser is acquiring the Certificates as principal for its own
account (or for the account of one or more other institutional investors for
which it is acting as duly authorized fiduciary or agent) for the purpose of
investment and not with a view to or for sale in connection with any
distribution thereof, subject nevertheless to any requirement of law that the
disposition of the Purchaser's property shall at all times be and remain within
its control.
5. The Purchaser does not qualify as (i) an employee benefit plan (a
"Plan") as defined in section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), whether or not it is subject to the
provisions of Title I of ERISA, (ii) a plan described in section 4975(e)(1) of
the Internal Revenue Code of 1986 (also a "Plan"), or (iii) an entity whose
underlying assets are deemed to be assets of a Plan by reason of such Plan's
investment in the entity (as determined under Department of Labor Regulations,
29 C.F.R. (S)2510.3-101 (1990)).
6. The Purchaser understands that such Certificate will bear a legend
substantially as set forth in the form of Certificate included in the Pooling
and Servicing Agreement.
7. The Purchaser, as holder of the Class [B-2/B-3I/C Subsidiary/C
Intermediate/C Master] Certificate, acknowledges (i) it may incur tax
liabilities in excess of any cash flows generated by the interest and (ii) it
intends to pay the taxes associated with holding the Class B-3I/C Subsidiary/C
Intermediate/C Master Certificate as they become due.
8. The Purchaser agrees that it will obtain from any purchaser of the
Certificates from it the same representations, warranties and agreements
contained in the foregoing paragraphs 1 through 7 and in this paragraph 8.
The representations and warranties contained herein shall be binding upon
the heirs, executors, administrators and other successors of the undersigned.
If there is more than one signatory hereto, the obligations, representations,
warranties and agreements of the undersigned are made jointly and severally.
M-2
Executed at _______________________,_____________, this __________ day of
_________________.
Purchaser's Name (Print)
By_______________________________________
Signature
Its
Address of Purchaser_____________________
__________________________________________
Purchaser's Taxpayer Identification Number
__________________________________________
__________________________________________
M-3
EXHIBIT N
---------
FORM OF MONTHLY REPORT
MANUFACTURED HOUSING CONTRACT SENIOR/SUBORDINATE
PASS-THROUGH CERTIFICATES, SERIES 2001-1
Distribution Date: ___________
Class A Certificates
--------------------
1 (a) Amount Available (including Monthly
Servicing Fee) ______
(b) Class M-1 Interest Deficiency Amount (if
any), Class M-2 Interest Deficiency Amount
(if any) and Class B-1 Interest Deficiency
Amount (if any) withdrawn for prior
Remittance Date ______
(c) Amount Available after giving effect to
withdrawal of Class M-1 Interest
Deficiency Amount, Class M-2 Interest
Deficiency Amount and Class B-1
Interest Deficiency Amount for prior ______
(d) Amount withdrawn from [Capitalized Interest]
[Pre-Funding] [Staged-Funding Contract Reserve] Account ______
Interest
--------
Class A Certificates
----------------------
2. Aggregate Class A interest
(a) Interest accrued at Class A-1A Remittance Rate (____%) ______
(b) Class A-1A Interest paid ______
(c) Interest accrued at Class A-1B Remittance Rate (5.010%) ______
(d) Class A-1B Interest paid ______
(e) Interest accrued at Class A-2 Remittance Rate (5.245%) ______
(f) Class A-2 Interest paid ______
(g) Interest accrued at Class A-3 Remittance Rate (5.655%) ______
(h) Class A-3 Interest paid ______
(i) Interest accrued at Class A-4 Remittance Rate (6.210%) ______
(j) Class A-4 Interest paid
N-1
(k) Interest accrued at Class A-5 Remittance Rate (the lesser
of (i) 6.990%, plus 0.50% from and after the first Remittance
Date on which the Pool Scheduled Principal Balance is equal
to or less than 20% of the Cut-off Date Pool Principal Balance,
and (ii) the Adjusted Weighted Average Contract Rate) _____
(l) Class A-5 Interest paid _____
(m) Interest Accrued at Class A-IO Remittance Rate (2.50%) _____
(n) Class A-IO Interest Paid _____
(o) Class A Interest Shortfall _____
3. Amount applied to Unpaid Class A Interest Shortfall
(a) Class A-1A _____
(b) Class A-1B _____
(c) Class A-2 _____
(d) Class A-3 _____
(e) Class A-4 _____
(f) Class A-5 _____
(g) Class A-IO _____
4. Remaining Unpaid Class A Interest Shortfall _____
Class M-1 Certificates
----------------------
5. Class M-1 Interest on Class M-1 Adjusted
Principal Balance _____
(a) Class M-1 Adjusted Principal Balance _____
(b) Interest accrued at Class M-1 Remittance Rate (7.535%,
unless the Adjusted Weighted Average Contract Rate
is less than 7.535%) _____
(c) Interest paid on Class M-1 Adjusted
Principal Balance _____
(d) Class M-1 Interest Shortfall _____
6. Amount applied to Unpaid Class M-1
Interest Shortfall _____
7. Remaining Unpaid Class M-1
Interest Shortfall _____
Class M-2 Certificates
----------------------
8. Class M-2 Interest on Class M-2 Adjusted
Principal Balance _____
(a) Class M-2 Adjusted Principal Balance _____
N-2
(b) Interest accrued at Class M-2 Remittance Rate (7.970%,
unless the Adjusted Weighted Average Contract Rate
is less than 7.970%) _____
(c) Interest paid on Class M-2 Adjusted
Principal Balance _____
(d) Class M-2 Interest Shortfall _____
9. Amount applied to Unpaid Class M-2
Interest Shortfall _____
10. Remaining Unpaid Class M-2
Interest Shortfall _____
Class B-1 Certificates
----------------------
11. Class B-1 interest on Class B-1 Adjusted
Principal Balance
(a) Class B-1 Adjusted Principal Balance _____
(b) Interest accrued at Class B-1 Remittance Rate
(8.915%, unless the Adjusted Weighted Average Contract
Rate is less than 8.915%) _____
(c) Interest paid on Class B-1 Adjusted
Principal Balance _____
(d) Class B-1 Interest Shortfall _____
12. Amount applied to Unpaid
Class B-1 Interest Shortfall _____
13. Remaining Unpaid Class B-1
Interest Shortfall _____
Principal
---------
14. Formula Principal Distribution Amount: _____
(a) Scheduled principal _____
(b) Principal Prepayments _____
(c) Liquidated Contracts _____
(d) Repurchases _____
(e) Plus principal received during the
first 10 days of the next Due Period _____
(f) Minus principal received during the
first 10 days of the prior Due Period _____
[(g) Pre-Funded Amount/Unfunded Contract Shortfall] _____
15. Pool Scheduled Principal Balance
N-3
16. Overcollateralization Amount (before principal distributions) _____
17. Additional Principal Distribution Amount _____
Class A Certificates
--------------------
18. Unpaid Class A Principal Shortfall
(if any) following prior Remittance Date
(a) Class A-1A _____
(b) Class A-1B _____
(c) Class A-2 _____
(d) Class A-3 _____
(e) Class A-4 _____
(f) Class A-5 _____
19. Class A Percentage for such
Remittance Date _____
20. Class A Percentage for the following
Remittance Date _____
21. Class A principal distribution (including Class A Percentage of
Formula Principal Distribution Amount, Unpaid Class A Principal
Shortfall and any Additional Principal Distribution Amount paid) _____
(a) Class A-1 _____
(b) Class A-1B _____
(c) Class A-2 _____
(d) Class A-3 _____
(e) Class A-4 _____
(f) Class A-5 _____
22. (a) Class A-1A Principal Balance _____
(b) Class ▇-▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ _____
(c) Class A-2 Principal Balance _____
(e) Class A-3 Principal Balance _____
(f) Class A-4 Principal Balance _____
(g) Class A-5 Principal Balance _____
(f) Class A-IO Notional Principal Amount _____
23. Unpaid Class A Principal Shortfall
(if any) following current
Remittance Date
(a) Class A-1A _____
(b) Class A-1B _____
(c) Class A-2 _____
N-4
(d) Class A-3
(e) Class A-4
(f) Class A-5
Class M-1 Distribution Test, Class M-2 Distribution Test
--------------------------------------------------------
and Class B-1 Distribution Test (calculations applicable
-------------------------------
on and after the Remittance Date occurring in May 2005)
24. Average Sixty-Day Delinquency Ratio Test
(a) Sixty-Day Delinquency Ratio for
current Remittance Date
(b) Average Sixty-Day Delinquency Ratio
(arithmetic average of ratios for this
month and two preceding months;
may not exceed 6.25%)
25. Cumulative Realized Losses Test
(a) Cumulative Realized Losses
for current Remittance Date
(b) As a percentage of Cut-off Date
Pool Principal Balance (may not
exceed 7.00% from April 1, 2005
to March 31, 2006; 8.75% from
April 1, 2006 to March 31, 2007;
11.75% from April 1, 2007 to
March 31, 2008; and 13.25% thereafter)
26. Current Realized Losses Test
(a) Current Realized Losses
for current Remittance Date
(b) Current Realized Loss Ratio (total
Realized Losses for most recent
three months, multiplied by 4,
divided by arithmetic average of
Pool Scheduled Principal Balances
for third preceding Remittance
Date and for current Remittance
Date; may not exceed 3.50%)
N-5
27. Class M-1 Principal Balance Test
(a) Sum of Class M-1 Principal Balance,
Class M-2 Principal Balance, Class B
Principal Balance and the Overcollateralization
Amount before distributions on current Remittance Date ______
(b) Divided by Pool Scheduled
Principal Balance as of preceding Remittance
Date (must be equal to or greater than 30.75%). ______
28. Class M-2 Principal Balance Test
(a) Sum of Class M-2 Principal Balance,
Class B Principal Balance and the
Overcollateralization Amount (before
distributions on current Remittance Date) ______
(b) Divided by Pool Scheduled Principal Balance
as of preceding Remittance Date (must be equal to or
greater than 21.75%). ______
29. Class B Principal Balance Test
(a) The Class B Principal Balance
(before any distributions on current
Remittance Date) as of such Remittance
Date (must be greater than $12,000,000) ______
(b) Sum of Class B Principal Balance
and the Overcollateralization Amount
(before distributions on current Remittance
Date) divided by Pool Scheduled
Principal Balance as of preceding
Remittance Date (must be equal to or greater
than 14.25%). ______
Class M-1 Certificates
----------------------
30. Class M-1 Percentage for such
Remittance Date ______
31. Class M-1 Percentage for the following
Remittance Date ______
N-6
32. Class M-1 principal distribution:
(a) Current (Class M-1 Percentage of Formula Principal
Distribution Amount) _____
(b) Unpaid Class M-1 Principal Shortfall _____
(c) Additional Principal Distribution Amount _____
33. Unpaid Class M-1 Principal Shortfall
(if any) following current
Remittance Date _____
34. Class M-1 Liquidation Loss Interest
(a) Class M-1 Liquidation Loss Amount _____
(b) Amount applied to Class M-1
Liquidation Loss Interest Amount _____
(c) Remaining Class M-1 Liquidation Loss
Interest Amount _____
(d) Amount applied to Unpaid Class M-1
Loss Interest Shortfall _____
(e) Remaining Unpaid Class M-1
Liquidation Loss Interest Shortfalls _____
Class M-2 Certificates
----------------------
35. Class M-2 Percentage for such
Remittance Date _____
36. Class M-2 Percentage for the following
Remittance Date _____
37. Class M-2 principal distribution
(a) Current (Class M-2 Percentage of Formula Principal
Distribution Amount) _____
(b) Unpaid Class M-2 Principal Shortfall _____
(c) Additional Principal Distribution Amount _____
38. Unpaid Class M-2 Principal Shortfall
(if any) following current
Remittance Date _____
N-7
39. Class M-2 Liquidation Loss Interest
(a) Class M-2 Liquidation Loss Amount ______
(b) Amount applied to Class M-2
Liquidation Loss Interest Amount ______
(c) Remaining Class M-2 Liquidation Loss
Interest Amount ______
(d) Amount applied to Unpaid Class M-2
Loss Interest Shortfall ______
(e) Remaining Unpaid Class M-2
Liquidation Loss Interest Shortfalls ______
Class B Certificates
--------------------
40. (a) Class B Percentage for such
Remittance Date ______
(b) Class B Percentage for the following
Remittance Date ______
41. Class B-1 principal distribution
(a) Current (Class B Percentage of
Formula Principal Distribution Amount) ______
(b) Unpaid Class B-1 Principal Shortfall ______
(c) Additional Principal Distribution Amount ______
42. Unpaid Class B-1 Principal Shortfall ______
43. Class B-1 Principal Balance ______
44. Class B-1 Liquidation Loss Interest ______
(a) Class B-1 Liquidation Loss Amount ______
(b) Amount applied to Class B-1
Liquidation Loss Interest Amount ______
(c) Remaining Class B-1 Liquidation Loss
Interest Amount ______
(d) Amount applied to Unpaid Class B-1
Liquidation Loss Interest Shortfall ______
N-8
(e) Remaining Unpaid Class B-1 Liquidation
Loss Interest Shortfall ______
Class B-2 Certificates
----------------------
45. Remaining Amount Available ______
Interest
--------
46. Interest accrued at Class B-2 Remittance Rate (11.250%,
unless the Adjusted Weighted Average Contract Rate
is less than 11.250%) ______
47. Class B-2 Interest paid ______
48. Current interest ______
49. Amount applied to Unpaid Class
B-2 Interest Shortfall ______
50. Remaining Unpaid Class B-2
Interest Shortfall ______
Principal
---------
51. Unpaid Class B-2 Principal Shortfall
(if any) following prior Remittance Date ______
52. Class B-2 Liquidation Loss
Amount ______
53. Current principal (zero until Class B-1
paid down; thereafter, Class B Percentage
of Formula Principal Distribution Amount) ______
54. Additional Principal Distribution Amount ______
55. Class B-2 Principal Balance ______
Class B-3I Certificates
-----------------------
56. (a) B-3I Remittance Rate
(The excess of (a) the Adjusted Weighted
Average Contract Rate over (b) the product
of (i) two and (ii) the weighted average
Remittance Rate of the Class I-Accrual
Interest and the Intermediate REMIC
Accretion Directed Interests, provided that
for this purpose the Remittance Rate for the
N-9
Class I-Accrual Interest shall not exceed zero
and the Remittance Rate for each Intermediate
REMIC Accretion Directed Interest shall not
exceed the Remittance Rate on its
Corresponding Certificate Class. Each Intermediate
REMIC Accretion Directed Interest has principal
balance equal to 1/2 that of its Corresponding Certificate
Class. Principal balance of Class I-Accrual
Interest equals 1/2 sum of Pool Scheduled
Principal Balance, Pre-Funded Amount and
Overcollateralization Amount as of preceding
Remittance Date after giving effect to
distributions on that date.) ______
(b) Class B-3I Notional Amount
(Pool Scheduled Principal Balance plus
Pre-Funded Amount as of preceding
Remittance Date) ______
(c) Payment under Section 8.03(a)(13) ______
(d) Pool Scheduled Principal Balance (on Remittance
Date on which aggregate Class Principal Balance of
Certificates is reduced to 0) ______
(e) Class B-3I Distribution Amount
(line (a) times line (b), less line (c), plus line
(d)), plus any Shortfall on prior Remittance
Date ______
(f) Distribution to Class B-3I Certificates ______
(g) Shortfall (line (e) less line (f)) ______
Class M and Class B Certificates
--------------------------------
57. Class M-1 Interest Deficiency Amount ______
58. Class M-2 Interest Deficiency Amount ______
59. Class B-1 Interest Deficiency Amount ______
Class A, Class M and Class B Certificates
-----------------------------------------
60. Pool Factor ______
N-10
61. Aggregate Scheduled Principal Balance of delinquent Contracts
as of Determination Date
(a) 30 - 59 days ______
(b) 60 days or more ______
62. Manufactured Homes repossessed ______
63. Manufactured Homes repossessed
but remaining in inventory ______
64. Repossessed Manufactured Homes purchased by Originator
or Subsidiary
(a) number of Contracts
current month ______
cumulative ______
(b) Scheduled Principal Balance
current month ______
cumulative ______
(c) Purchase Price
current month ______
cumulative ______
65. Weighted Average Contract Rate ______
66. Adjusted Weighted Average
Contract Rate ______
Please contact Bondholder Services Department of U.S. Bank National Association,
1-800-934-6802 with any questions regarding this Statement or your Distribution.
N-11
EXHIBIT O
---------
FORM OF ADDITION NOTICE
______________, 2001
U.S. Bank National Association
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement (the "Agreement"), dated as of March
1, 2001, among Conseco Finance Corp. (the "Company"), Conseco Finance
Securitizations Corp. (the "Seller") and U.S. Bank National
Association as Trustee (the "Trustee") relating to Manufactured
Housing Contract Senior/Subordinate Pass-Through Certificates, Series
2001-1
Ladies and Gentlemen:
Capitalized terms not otherwise defined in this Notice have the meanings
given them in the Agreement. The Seller hereby notifies the Trustee of an
assignment to the Trust of Subsequent Contracts on the date and in the amounts
set forth below:
Subsequent Transfer Date: _________________
Cut-off Date Principal Balance of Subsequent Contracts to be assigned to
Trust on Subsequent Transfer Date: $_____________
Please acknowledge your receipt of this notice by countersigning the
enclosed copy in the space indicated below and returning it to the attention of
the undersigned.
Very truly yours,
CONSECO FINANCE SECURITIZATIONS CORP.
By___________________________________
Name:
Title:
ACKNOWLEDGED AND AGREED:
U.S. BANK NATIONAL ASSOCIATION
By_________________________________
Name:
Title:
O-1
EXHIBIT P
---------
FORM OF SUBSEQUENT TRANSFER INSTRUMENT
In accordance with the Pooling and Servicing Agreement (the "Agreement")
dated as of March 1, 2001, among Conseco Finance Corp. (the "Originator"),
Conseco Finance Securitizations Corp. (the "Seller") and U.S. Bank National
Association as Trustee (the "Trustee"), the Seller does hereby transfer, assign,
set over and otherwise convey, without recourse, to Manufactured Housing
Contract Senior/Subordinate Pass-Through Certificate Trust 2001-1, created by
the Agreement, to be held in trust as provided in the Agreement, (i) all the
right, title and interest of the Seller in and to the Subsequent Contracts
identified on the list attached hereto as Exhibit A-1 (the "Subsequent
Contracts"), including, without limitation, all right, title and interest in and
to the Collateral Security and all rights to receive payments on or with respect
to the Subsequent Contracts (other than the principal and interest due on the
Subsequent Contracts on or before the applicable Cut-off Date), (ii) all rights
under every Hazard Insurance Policy relating to a Manufactured Home securing a
Subsequent Contract for the benefit of the owner of such Subsequent Contract,
(iii) all rights under all FHA/VA Regulations pertaining to any Subsequent
Contract that is an FHA/VA Contract, (iv) the proceeds from the Errors and
Omissions Protection Policy and all rights under any blanket hazard insurance
policy to the extent they relate to the Manufactured Homes, (v) all documents
contained in the Contract Files and the Land-and-Home Contract Files relating to
the Subsequent Contracts, (vi) all rights of the Seller under the Subsequent
Transfer Agreement of even date herewith between the Originator and the Seller
and (vii) all proceeds and products of the foregoing.
This Assignment is made pursuant to and upon the representation and
warranties on the part of the undersigned contained in Section 2.03 and Article
III of the Agreement and no others. All undefined capitalized terms used in this
Assignment have the meanings given them in the Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be duly
executed this __ day of ________, 2001.
CONSECO FINANCE SECURITIZATIONS CORP.
By____________________________________
Name:
Title:
P-1
EXHIBIT Q
---------
FORM OF OFFICER'S CERTIFICATE (SUBSEQUENT TRANSFER)
The undersigned certifies that [s]he is a [title] of Conseco Finance
Securitizations Corp., a Minnesota corporation (the "Company"), and that as such
[s]he is duly authorized to execute and deliver this certificate on behalf of
the Company in connection with the Pooling and Servicing Agreement dated as of
March 1, 2001 (the "Agreement") among the Company, Conseco Finance Corp. and
U.S. Bank National Association as Trustee. All capitalized terms used herein
without definition have the respective meanings specified in the Agreement. The
undersigned further certifies that:
1. This Certificate is delivered in connection with the sale to the Trust
on __________________ (the "Subsequent Transfer Date") of Contracts (the
"Subsequent Contracts") identified in the List of Contracts attached to the
Subsequent Transfer Instrument of even date herewith.
2. As of the Subsequent Transfer Date, all representations and warranties
in Section 3.01 of the Agreement are true and correct and all representations
and warranties in Section 3.03 of the Agreement with respect to the Subsequent
Contracts are true to the best of [her][his] knowledge.
3. All conditions precedent to the sale of the Subsequent Contracts to
the Trust under Section 2.03 of the Agreement have been satisfied.
4. As of the Subsequent Transfer Date, the Company is not insolvent and
will not be made insolvent by the transfer of the Subsequent Contracts, and the
undersigned is not aware of any pending insolvency of the Company.
IN WITNESS WHEREOF, I have affixed hereunto my signature this ___ day of
_________, 2001.
By___________________________________
Name:
Title:
Q-1